Court Opinion

ID: 6479850
Source: CourtListenerOpinion
Date Created: 2022-06-26 22:56:07.79903+00
Date Added: 2024-06-11T14:59:36.461625
License: Public Domain

OROZCO, Judge,
dissenting.
¶ 25 Because I agree with BYS Inc. v. Smoudi, 228 Ariz. 573, 578, ¶ 20, 269 P.3d 1197, 1202 (App.2012) and believe a party who has appeared when damages are liquidated is entitled to notice and an opportunity to be heard pursuant to Arizona Rule of Civil Procedure 55(b)2,1 respectfully dissent.
¶ 26 A defendant in a civil action must respond within twenty days after service of the summons and complaint. Ariz. R. Civ. P. 12(a)(1)(A). If the defendant “has failed to plead or otherwise defend” within twenty days, the plaintiff may file an application for entry of default. Ariz. R. Civ. P. 55(a). The entry of default becomes effective ten days after the filing of the application, unless, within that time, the defendant pleads or otherwise defends. Ariz. R. Civ. P. 55(a)(2), (3).
¶ 27 After entry of default becomes effective, a plaintiff may file a motion for default judgment. Ariz. R. Civ. P. 55(b)1. If the defendant has not appeared in the action and the damages sought in the complaint are liquidated,11 the court shall enter judgment on plaintiffs motion without conducting a hearing on damages. Ariz. R. Civ. P. 55(b)1. Pursuant to Arizona Rule of Civil Procedure 55(b)2, “[i]n all other eases,” the plaintiff must apply for judgment and serve the defendant with written notice of the application for judgment at least three days prior to a hearing on the application. See BYS Inc., 228 Ariz. at 577, ¶ 13, 269 P.3d at 1201. In other words, I read Rule 55(b)2 to require “a noticed hearing on an application for judgment when a party has: (1) appeared, regardless of whether the damages are liquidated or unliquidated; and (2) when a party has not appeared, and the damages are unliquidated.” Id. at 578, ¶ 20, 269 P.3d at 1202 (emphasis added). Thus, if a defendant has appeared in the action,12 the defendant is entitled to a three-day written notice of the hearing on the application for judgment. BYS Inc., 228 Ariz. at 578, ¶ 20, 269 P.3d at 1202. The failure to give a defendant who has appeared in the action three days’ notice of the hearing on the application for entry of a default judgment renders the resulting judgment void. Id.
*243¶ 28 In this case, counsel for TrustCash filed a notice of appearance on February 16, 2010. The notice was an appearance for purposes of Rule 55(b)2 because it demonstrated TrustCash’s knowledge that the ease was in court and its submission to the court’s jurisdiction. See id. at 578, ¶¶ 19-21, 269 P.3d at 1202; Tarr, 142 Ariz. at 351-52, 690 P.2d at 70-71. TrustCash’s notice of appearance, however, did not constitute an answer or responsive pleading; therefore, TrustCash was properly subjected to default pursuant to Rule 55(a). Ariz. Dep’t of Revenue v. Superior Court ex rel. Ariz. Tax Court, 165 Ariz. 47, 49, 796 P.2d 479, 481 (App.1990). The notice of appearance indicated that Trust-Cash appeared in the action and, therefore, was entitled to three days’ notice of the hearing on Searehtoppers’ application for default judgment. Because Searehtoppers did not serve notice of the Third Motion for Default Judgment on TrustCash, the judgment is void.13 Accordingly, the court erred in not setting it aside pursuant to Rule 60(c). See BYS Inc., 228 Ariz. at 578, ¶¶ 19-21, 269 P.3d at 1202.
¶ 29 The majority contends Rule 55(b)l does not require notice if the damages are liquidated and default has been entered against defendant. In so arguing, the majority overlooks a key distinction drawn in Rule 55(b). While the rule does provide that when damages are liquidated “the Court, shall enter judgment for that amount and costs against the defendant,” it specifically qualifies that the court shall do so “if the defendant has been defaulted for failure to appear.” Ariz. R. Civ. P. 55(b)1 (emphasis added). “In all other cases,” which I take to mean eases in which the defendant has been defaulted for failing to plead or otherwise defend as set forth in Rule 55(a), the applicable procedure for obtaining a default judgment is found in Rule 55(b)2. Indeed, Rule 55(b)2 explicitly contemplates the situation, as is the case here, in which “the party against whom judgment by default is sought has appeared in the action” and requires “that [the] party ... be served with written notice of the application for judgment at least three days prior to the hearing on such application.” (Emphasis added). If we were to interpret Rule 55(b) 1 as the majority suggests, we would be holding that “appearance” and “plead and otherwise defend” have the same meaning. I reject such an interpretation.14 See In re Moises L., 199 Ariz. 432, 434, ¶ 6, 18 P.3d 1231, 1233 (App.2000) (“[W]e undertake to avoid rendering statutory language superfluous, void, contradictory, or insignificant.” (internal quotation marks omitted)).
¶ 30 Accordingly, I believe that if a defendant has failed to appear and the damages are liquidated, a three-day written notice is not required. But, when a defendant has appeared and has been defaulted only for failing to plead or defend, then Rule 55(b)2 applies and a three-day written notice is required. “ ‘An appearance does not prevent a party from being in default for failure to plead or otherwise defend,’ Rogers v. Tapo, 72 Ariz. 53, 57, 230 P.2d 522, 525 (1951), but it does require the entry of default judgment to occur by hearing as provided in Rule 55(b)(2).” Estate of Lewis v. Lewis, 229 Ariz. 316, 327, ¶ 34, 275 P.3d 615, 626 (App.2012).
¶ 31 In this case, according to the Affidavit of Default, TrustCash was defaulted for failing to “plead or otherwise defend.” When TrustCash filed a notice of appearance, the notice was an appearance for purposes of Rule 55(b)2 because it demonstrated Trust-*244Cash’s knowledge that the ease was in court and its submission to the court’s jurisdiction. See BYS Inc., 228 Ariz. at 578, ¶¶ 19-21, 269 P.3d at 1202; Tarr, 142 Ariz. at 351-52, 690 P.2d at 70-71. TrustCash was, therefore, entitled to three days’ notice of the hearing on Searchtoppers’ application for default judgment.15 Accordingly, because Searchtoppers did not serve notice of the Third Motion for Default Judgment on TrustCash, the judgment is void and the court erred in not setting it aside pursuant to Rule 60(c). See BYS Inc., 228 Ariz. at 578, ¶¶ 19-21, 269 P.3d at 1202.
¶ 32 The majority argues that Tarr is inapplicable because it dealt with unliquidated damages. However, Tarr does not indicate whether the damages were liquidated or unliquidated. Furthermore, the issue in Tarr was outlined as follows: “Does a purported answer, filed after an entry of default but before application for a default judgment, constitute an appearance entitling the defaulting party to notice of default judgment under Arizona Rules of Civil Procedure, Rule 55(b)(2)?” Tarr, 142 Ariz. at 350, 690 P.2d at 69 (emphasis added). This is precisely the issue in this case. Had our supreme court wanted to limit Tarr only to cases involving unliquidated damages, it would have done so.
¶ 33 Furthermore, in this case, Searchtoppers did not specify the amount of attorney fees requested. Rule 55(b)1 states
If the claim requests an award of attorneys’ fees, but fails to specify the amount of such fees that will be sought in the event judgment is rendered by default, the judgment may include an award of attorneys’ fees, if such an award is allowed by law and the reasonable amount therefor[e] is established by affidavit, where the defendant has not entered an appearance in the action.
The comment to this rule also states
A party desiring to preserve his right to prove the amount of reasonable attorneys’ fees to which he is entitled at the time of default, without the limitation set by a prayer for a specific amount, may plead entitlement to an unspecified reasonable amount of attorneys’ fees with knowledge that he must proceed by hearing pursuant to 55(b)(2) upon default.
See Committee Comment to Ariz. R. Civ. P. 55(b) 1984 Amendment. Therefore, at a minimum, Searchtoppers was required to give TrustCash notice of the hearing pursuant to Rule 55(b)2 for the attorney fees.
¶ 34 Because I believe the matter should be remanded for a determination of damages and attorney fees, I would not reach the issue of whether the superior court abused its discretion in denying TrustCash’s motion to vacate the default judgment. Also, I would not award Searchtoppers attorney fees or costs.

. Damages are "liquidated” under Rule 55(b) if "the amount sought by the complaint is for a sum certain or for a sum that can be computed with certainty.” BYS Inc., 228 Ariz. at 577, ¶ 13, 269 P.3d at 1201.

. A party against whom default is entered loses the right to litigate the merits of the action but may still appear in the action to contest damages. Tarr v. Superior Court, 142 Ariz. 349, 351, 690 P.2d 68, 70 (1984); BYS Inc., 228 Ariz. at 578, ¶ 19, 269 P.3d at 1202. Such appearance can occur after default has been entered. See Tarr, 142 Ariz. at 351-52, 690 P.2d at 70-71.

. In both the First and Second Motions for Default Judgment, Searehtoppers followed the correct procedure under Rule 55(b)2 by requesting a hearing on the motions and serving notice of the hearing on TrustCash. However, because judgment was entered on the Third Motion for Default Judgment without notice to TrustCash and without hearing, the judgment was not entered in accordance with the procedure described in Rule 55(b)2.

. "Appearance” applies when the defendant recognizes that the case is in court and submits himself to the court's jurisdiction. Tarr, 142 Ariz. at 351, 690 P.2d at 70 (citing Austin v. State ex rel. Herman, 10 Ariz.App. 474, 477, 459 P.2d 753, 756 (1969)). On the other hand, "plead” means "[t]o assert or allege in a pleading” and "defend” means “[t]o deny, contest, or oppose.” Black's Law Dictionary (9th ed. 2009). In other words, appearance is just submitting oneself to the jurisdiction of the court, whereas plead and defend means a defendant opposes the allegations of the plaintiff by filing a responsive pleading.

. I also note that in its Third Motion for Default Judgment, Searchtoppers moved for judgment pursuant to Rule 55(b)2, which sets forth the procedure for obtaining judgment when the defendant has appeared or when the damages are unliquidated. Thus, Searchtoppers' motion was made pursuant to authority that entitled Trust-Cash to three days’ notice and a hearing.