Court Opinion

ID: 4156720
Source: CourtListenerOpinion
Date Created: 2017-03-30 15:10:42.39602+00
Date Added: 2024-06-11T14:04:10.533680
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  UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

                    LOS INDIOS, LLC, Plaintiff/Appellant,

                                         v.

                          TE DAY, Defendant/Appellee.

                              No. 1 CA-CV 16-0222
                                  FILED 3-30-17

           Appeal from the Superior Court in Maricopa County
                          No. CV2015-093642
           The Honorable Margaret E. Benny, Judge Pro Tempore

                                   AFFIRMED

                                    COUNSEL

Fidelity National Law Group, Phoenix
By Patrick J. Davis, Nathaniel B. Rose
Counsel for Plaintiff/Appellant

Joseph W. Charles PC, Glendale
By Joseph W. Charles
Counsel for Defendant/Appellee

                        MEMORANDUM DECISION

Judge Lawrence F. Winthrop delivered the decision of the Court, in which
Presiding Judge Randall M. Howe and Judge Jon W. Thompson joined.
                            LOS INDIOS v. DAY
                            Decision of the Court

W I N T H R O P, Judge:

¶1            Appellant Los Indios, LLC (“Indios”), as successor in interest
to Riggs Circle, Inc. (“Riggs”), challenges the trial court’s ruling setting
aside a default judgment Riggs obtained against Appellee Te Day. We
affirm for the reasons discussed below.

                 FACTS AND PROCEDURAL HISTORY

¶2            Riggs owned an apartment complex in Mesa. Either Riggs or
its predecessor issued twenty-five stock certificates, one for each apartment
unit, which gave each resident exclusive possession of his or her unit. In
1990, Day entered a “License Agreement with Option to Purchase” with a
former Riggs shareholder that granted her sole use and occupancy of one
unit in the complex.

¶3              Riggs sued Day, seeking to quiet title to the unit as part of its
efforts to sell the complex. Riggs served Day with a summons and a copy
of its amended complaint on August 28, 2015. In response, Day filed a letter
addressed to the trial judge on September 15, 2015. In her letter, she
acknowledged living in the unit at issue, complained about various
problems at the complex, and alleged that the “new owner” wanted “to sell
all his units and make us sell ours.” She also asked the trial judge to appoint
an arbiter to resolve the dispute.

¶4            Day filed a second letter with a coversheet titled “Civil
Answer” six days later and paid the requisite filing fee. She alleged that
she “had no idea” her 1990 agreement “would cause a cloud on the title.”
She also alleged that “[a]ll [Riggs] had to do was ask me to sign a Quit Claim
deed, and [I] would have been happy to comply,” and asked for the trial
judge’s assistance. Although she filed both letters, it does not appear she
served either of them on Riggs.

¶5           Later that same day, unaware of Day’s letters, Riggs applied
for entry of default. Riggs moved for default judgment against Day
approximately two weeks later. Riggs tried to give Day notice of the default
judgment hearing, which took place on October 28, 2015. When Day did
not appear, the trial court entered final default judgment pursuant to
Arizona Rule of Civil Procedure (“Rule”) 54(b).1

1      The Arizona Rules of Civil Procedure underwent significant
revisions effective January 1, 2017. Unless otherwise noted, we cite the
Rules in effect at the time of this dispute.

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                            LOS INDIOS v. DAY
                            Decision of the Court

¶6            Day moved to set aside the default judgment a few months
later. She acknowledged receiving notice of the default but contended that
she did not learn of the default judgment until a few days before she filed
her motion. She also contended that her two letters constituted a valid
answer to the amended complaint and stated her intent to defend against
Riggs’ claim by demonstrating she owned the unit at issue.

¶7            After a hearing, the trial court found “the default did not
become effective due to the ‘Answer’ filed by [Day] on September 21, 2015”
and set aside the default judgment under Rule 60(c)(6). Riggs timely
appealed. Riggs later sold the complex to Indios, and the parties stipulated
to substitute Indios as the appellant in this case. We have jurisdiction
pursuant to Arizona Revised Statutes (“A.R.S.”) section 12-2101(A)(2)
(2016). See Brumett v. MGA Home Healthcare, L.L.C., 240 Ariz. 420, 428, ¶ 14,
380 P.3d 659, 667 (App. 2016).

                                 ANALYSIS

¶8            We will affirm a ruling setting aside a default judgment
absent a clear abuse of discretion. Cockerham v. Zikratch, 127 Ariz. 230, 233,
619 P.2d 739, 742 (1980). The trial court abuses its discretion if it sets aside
a default judgment without legal justification. Id. Generally, we resolve
doubts in favor of the party seeking to set aside a default judgment because
the law favors resolution on the merits. Richas v. Superior Court, 133 Ariz.
512, 514, 652 P.2d 1035, 1037 (1982).

¶9            Indios contends Day’s letters were not a valid answer because
(1) they did not substantively respond to the allegations of Riggs’ amended
complaint and (2) she did not serve either letter on Riggs. We address each
contention in turn.

       I.     Day’s Letters Stated Possible Defenses to Riggs’ Claim

¶10           An answer must “state in short and plain terms the party’s
defenses to each claim asserted and shall admit or deny the averments upon
which the adverse party relies.” Ariz. R. Civ. P. 8(b). Extensive fact
pleading is not required. Rosenberg v. Rosenberg, 123 Ariz. 589, 592-93, 601
P.2d 589, 592-93 (1979).

¶11           Riggs sought in its amended complaint to quiet title to Day’s
unit, alleging that Day’s 1990 “License Agreement” did not grant her any
real property interest in the unit. Day responded in her second letter that
neither she nor the prior occupant of the unit “signed any deed in
connection with the agreement” and that she “had no idea” her agreement

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                            LOS INDIOS v. DAY
                            Decision of the Court

“would cause a cloud on the title.” She denied that the agreement caused
a title issue, alleging she was told her name “did not come up on the title
report.” She also alleged that she was willing to sign a quitclaim deed, but
that Riggs was “trying to sell [her] home . . . out from under [her]” when
she was not “in any position to be moved out of this home.”

¶12           Although Day’s letters are not pleading exemplars, they
addressed the salient allegations of Riggs’ amended complaint.
Accordingly, her letters met the Rule 8(b) standard. Cf. Dons Club v.
Anderson, 83 Ariz. 94, 96-97, 317 P.2d 534, 535-36 (1957) (concluding an
answer that set forth “affirmative allegations diametrically opposed to the
allegations in the complaint” was sufficient under Rule 8(b)).

       II.    Day’s Failure to Serve Riggs Did Not Entitle Riggs to Default
              Judgment

¶13            A defendant must file and serve his or her answer. Ariz. R.
Civ. P. 12(a). Day does not dispute that she did not serve either of her letters
on Riggs. But Indios cites no authority, nor are we aware of any, holding
that the failure to serve a properly-filed answer, standing alone, entitles a
plaintiff to default judgment. Nothing in the record suggests that Day’s
failure to serve her letters on Riggs was either intentional or the result of
bad faith. Her answer was timely filed, and the court’s decision to allow
the matter to proceed on the merits was not an abuse of discretion.

¶14            Further, counsel must stay informed regarding the status of
cases in which they have appeared. Ariz. R. Civ. P. 5.1(b); Haroutunian v.
Valueoptions, Inc., 218 Ariz. 541, 557, ¶ 48, 189 P.3d 1114, 1130 (App. 2008).
The trial court noted counsel’s duty and the court’s own responsibility
when Riggs raised at oral argument Day’s failure to serve the letters:

       And I also looking back at it see it as probably an error on both
       your part and my part prior to the granting of the default
       judgment. We should have looked more closely on the
       Court’s case docket to ensure that this was an appropriate
       case for a default judgment.

We agree that Riggs should have checked the court docket either before
moving for default judgment or before the default judgment hearing to
confirm Day had not filed anything. In determining whether Riggs was
entitled to the entry of a default judgment, the court and/or court staff
should have also made the same inquiry. Given our strong preference that
disputes be resolved on their merits, we cannot say the trial court clearly

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                           LOS INDIOS v. DAY
                           Decision of the Court

abused its discretion in setting aside the default judgment. Almarez v.
Superior Court, 146 Ariz. 189, 191, 704 P.2d 830, 832 (App. 1985).

       III.   Day Did Not Have to Comply with Rule 60(c)(6) Because the
              Default Judgment Was Void

¶15           As noted above, the trial court set aside the default judgment
under Rule 60(c)(6). Indios contends Day did not satisfy Rule 60(c)(6)
because she did not act promptly in seeking relief or show that she had a
meritorious defense to Riggs’ claim. See Jepson v. New, 164 Ariz. 265, 277,
792 P.2d 728, 740 (1990).

¶16            Day filed both of her letters before Riggs applied for entry of
default and thus her answer was filed before the default became effective.
See Ariz. R. Civ. P. 55(a)(3), (4). The trial court therefore should have set
aside the default judgment as void under Rule 60(c)(4). See Corbet v. Superior
Court, 165 Ariz. 245, 248, 798 P.2d 383, 386 (App. 1990). Trial courts have
no discretion in setting aside a void judgment. Martin v. Martin, 182 Ariz.
11, 14, 893 P.2d 11, 14 (App. 1994). Accordingly, we need not decide
whether Day complied with Rule 60(c)(6). See Corbet, 165 Ariz. at 248, 798
P.2d at 386 (“If the default or default judgment is void, then the trial court
should and indeed must grant relief without requiring the party seeking
relief to do anything more than to demonstrate that the judgment is void.”).

                              CONCLUSION

¶17           We affirm the trial court’s ruling setting aside the default
judgment against Day. Indios requests attorneys’ fees pursuant to A.R.S.
§ 12-341.01. Because Indios is not the successful party on appeal, we deny
that request. Day also requests attorneys’ fees on appeal, but cites no
authority for that request. In our discretion, we deny Day’s request for
attorneys’ fees on appeal, but award Day her costs incurred on appeal upon
compliance with Arizona Rule of Civil Appellate Procedure 21.

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

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