Advanced v. Gladden

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.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

ADVANCED PROPERTY TAX LIENS, INC., an Arizona corporation,
Plaintiff/Appellant,

v.

JODY L. GLADDEN, an unmarried women, Defendant/Appellee.

No. 1 CA-CV 14-0478
FILED 12-15-2015

Appeal from the Superior Court in Maricopa County
No. CV2013-093289
The Honorable Margaret Benny, Judge Pro Tempore

AFFIRMED

COUNSEL

Kessler Law Offices, Mesa
By Eric W. Kessler
Counsel for Plaintiff/Appellant

Bueler Jones LLP, Chandler
By Gordon S. Bueler
Counsel for Defendant/Appellee
 ADVANCED v. GLADDEN
Decision of the Court

MEMORANDUM DECISION

Judge Maurice Portley delivered the decision of the Court, in which
Presiding Judge Margaret H. Downie and Judge Patricia A. Orozco joined.

P O R T L E Y, Judge:

¶1 Advanced Property Tax Liens, Inc. (“Advanced”) appeals the
ruling rescheduling a default hearing and the trial court’s subsequent
determination that Jody L. Gladden successfully redeemed her property
before the rescheduled hearing. Finding no error, we affirm.

FACTUAL AND PROCEDURAL BACKGROUND

¶2 A tax lien was assessed against property Gladden owned in
Peoria. Advanced subsequently purchased the lien from the Maricopa
County Treasurer and filed a lawsuit to foreclose Gladden’s right to redeem
the property under Arizona Revised Statutes (“A.R.S.”) section 42-18201.1
Gladden was served, did not file an answer, and Advanced filed an
application for default and sent her a copy on April 21, 2014. A default
judgment without hearing was entered on May 5, 2014.

¶3 Gladden timely moved to set aside the default judgment,
arguing the judgment was improper because it was entered before the
default became effective. See Ariz. R. Civ. P. 55(a)(3) (a default does not
become effective until ten days after the application for entry of default is
filed). The trial court agreed, orally set aside the default judgment, but not
the default, and rescheduled the default proceedings. The court did not,
however, issue a contemporaneous written order.

¶4 Prior to the rescheduled hearing, Gladden deposited the full
redemption amount with the Treasurer and filed a “Notice of Redemption.”
The Treasurer did not immediately issue a certificate of redemption under
A.R.S. § 42-18154(A). After the hearing, the court issued a signed order
affirming that the default judgment had been set aside and finding
Gladden’s redemption was effective. Advanced appealed and we have
jurisdiction pursuant to A.R.S. § 12-2101(A)(1) and (2).

1 We cite to the current version of a statute unless otherwise noted.

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 ADVANCED v. GLADDEN
Decision of the Court

DISCUSSION

I. The Default Hearing

¶5 Although conceding the default judgment was properly set
aside, Advanced argues that the trial court erred by postponing the default
proceedings for seven days. Advanced contends that the court should have
held the default hearing as scheduled because Gladden “had not appeared
in the action.” We disagree.

¶6 Rule 55(b)(2) provides, in relevant part, that:

If the party against whom judgment by default
is sought has appeared in the action, that party
or, if appearing by representative, that party’s
representative, shall be served with written
notice of the application for judgment at least
three days prior to the hearing on such
application.

Ariz. R. Civ. P. 55(b)(2). If a defendant who has appeared does not receive
three days’ written notice of the default hearing, the default judgment is
void. Gustafson v. McDade, 26 Ariz. App. 322, 323, 548 P.2d 415, 416 (1976).

¶7 Although Gladden did not file an answer, she appeared by
moving to set aside the default judgment. She was unaware of the pending
hearing two days later and only learned about it after receiving Advanced’s
response. As a result, because she made an appearance, Advanced could
not secure a default judgment without giving her three days’ written notice.
See BYS Inc. v. Smoudi, 228 Ariz. 573, 578, ¶ 20, 269 P.3d 1197, 1202 (App.
2012) (“Once a defendant has appeared, a default judgment can be obtained
only after a hearing by the court upon three days’ written notice.”).

¶8 Advanced contends that the hearing was sufficient to allow
the court to enter a default judgment. We disagree. Gladden only had one
day’s notice of the hearing. Rule 55(b)(2) specifically requires three days’
notice. See Gustafson, 26 Ariz. App. at 323, 548 P.2d at 416. Moreover, the
rule does not specify when the first appearance occurs —three days’ notice
is required if the appearance occurs before a hearing to secure a default
judgment. See Ruiz v. Lopez, 225 Ariz. 217, 221, ¶ 12, 236 P.3d 444, 448 (App.
2010) (“We interpret procedural rules according to their plain meaning.”).
As a result, the court properly rescheduled the default hearing so that
Gladden would have the three day notice before the hearing. We find no
error.

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 ADVANCED v. GLADDEN
Decision of the Court

II. Redemption Was Effective

¶9 Advanced also argues that Gladden’s attempt to redeem the
property was ineffective because she redeemed the lien before she had a
written order setting aside the default judgment. Advanced cites an email
received from the Treasurer’s Office stating that “[w]ithout the Court Order
setting aside the first judgment [Gladden’s] redemption can’t be
processed.” We disagree.

¶10 First, A.R.S. § 42-18206 permits a person entitled to redeem a
property to do so “at any time before judgment is entered, notwithstanding
that an action to foreclose has been commenced.” (Emphasis added.)
Because both parties were aware of the court’s ruling, Gladden paid funds
to redeem her property before the entry of a valid final judgment and was
successful.

¶11 Moreover, there is no requirement that parties with actual
knowledge of a court’s order setting aside a default must wait for a written
or signed order before exercising the statutory right of redemption. And
Advanced has not cited to any statutory or case law that required Gladden
to wait for a written or signed order before paying the redemption fees in
the short time before the court’s ruling and the rescheduled hearing.2

¶12 Finally, Advanced’s reliance on Friedemann v. Kirk, 197 Ariz.
616, 5 P.3d 950 (App. 2000), does not change our analysis. Friedemann was
a quiet title action where we found that “the trial court erred in granting the
Treasurer’s motion to vacate the entry of default judgment because [the
property owner’s] right to redeem the property tax lien was already
foreclosed at the time the Treasurer accepted her redemption payment.” Id.
at 617, ¶ 1, 5 P.3d at 951. Here, there was no final default judgment at the
time Gladden tendered the redemption fees because the default judgment
had been set aside. Consequently, there was no legal impediment
preventing Gladden from redeeming her property. Therefore, the trial
court did not err in finding that the redemption was effective.

2 Advanced cites A.R.S. § 42-18154, but the statute merely requires the
Treasurer to issue a certificate of redemption, lists the information that must
be included in the certificate, and authorizes the holder to record the
certificate. The statute is silent about any requirement that a redeeming
party must first seek or secure a written order to satisfy the Treasurer that
he or she has the right to redeem. See A.R.S. § 42-18154(A).

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 ADVANCED v. GLADDEN
Decision of the Court

¶13 Because Gladden has prevailed on appeal, we award her costs
on appeal upon compliance with ARCAP 21.

CONCLUSION

¶14 We affirm the trial court’s rulings.

:ama

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