Campbell v. Murphy

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

MICHAEL STEVEN CAMPBELL, Plaintiff/Appellee,

v.

JULIANA LUCIA MURPHY, Defendant/Appellant.

No. 1 CA-CV 19-0432
FILED 4-30-2020

Appeal from the Superior Court in Maricopa County
No. CV 2018-056291
The Honorable Steven K. Holding, Judge Pro Tempore (Retired)

AFFIRMED

COUNSEL

G. David DeLozier, PC, Phoenix
By G. David DeLozier
Counsel for Defendant/Appellant

Hatcher Nolasco & Fletcher PLLC, Phoenix
By Thomas R. Nolasco, Michael R. Fletcher
Counsel for Plaintiff/Appellee
 CAMPBELL v. MURPHY
Decision of the Court

MEMORANDUM DECISION

Judge Jennifer B. Campbell delivered the decision of the Court, in which
Presiding Judge Paul J. McMurdie and Judge Kent E. Cattani joined.

C A M P B E L L, Judge:

¶1 Juliana Murphy appeals from the superior court’s denial of
her motion for relief from a default judgment granted in favor of Michael
Campbell. For the following reasons, we affirm.

BACKGROUND

¶2 Upon ending their 35-year romantic relationship, Murphy
and Campbell agreed to return each other’s personal property. At that time,
a substantial portion of Campbell’s art collection was housed at Murphy’s
or her mother’s residence or storage units.

¶3 Eight years later, Campbell demanded that Murphy return
the artwork. He discovered, however, that Murphy had sold at least one
piece from his collection, through an auction house, for $80,000.

¶4 On November 9, 2018, Campbell filed a complaint against
Murphy alleging breach of contract, breach of the covenant of good faith
and fair dealing, conversion, and unjust enrichment. He also sought a
declaratory judgment determining that artwork in Murphy’s possession is
his personal property and an injunction to prevent Murphy from selling
other pieces from his collection.

¶5 On January 27, 2019, Murphy was served with the complaint
and a summons. On February 20, 2019, after Murphy failed to respond to
the complaint, Campbell applied for entry of default. On March 25, 2019,
Campbell moved for an entry of default judgment with hearing to prove
damages. On April 2, 2019, after holding a default hearing in Murphy’s
absence, the superior court entered a default judgment that, among other
things: (1) awarded Campbell $80,000, (2) declared Campbell the sole
owner of specified artwork in Murphy’s possession, (3) ordered Murphy to
account for the artwork in her possession, (4) enjoined Murphy from
selling, moving, or destroying the artwork, and (5) required Murphy to
relinquish the artwork to Campbell.

2
 CAMPBELL v. MURPHY
Decision of the Court

¶6 Three days later, Murphy moved to set aside the default
judgment for good cause. She argued her failure to defend the action was
the result of excusable neglect, asserting she did not receive a mailed notice
of the default hearing until the evening of April 2, 2019. She also asserted
that: (1) Campbell’s claims are time-barred because he did not bring the
action within four years of the parties’ oral agreement, and (2) she is, at a
minimum, a co-owner of the artwork.

¶7 After an evidentiary hearing on the motion, the superior court
found Murphy “failed to establish excusable neglect,” having been
properly served the complaint and notified of the hearing. Accordingly, the
court denied her motion to set aside the default judgment. Murphy timely
appealed.

DISCUSSION

¶8 Arguing the superior court improperly denied her motion to
set aside the default judgment, Murphy contends that: (1) Campbell’s
application for entry of default was premature, and (2) she demonstrated
“good cause” warranting relief.

¶9 We affirm a superior court’s denial of a motion for relief from
judgment absent a clear abuse of discretion and view the facts in the light
most favorable to upholding the court’s ruling. Ezell v. Quon, 224 Ariz. 532,
534, 536, ¶¶ 2, 15 (App. 2010). But we review de novo the interpretation of
applicable rules. Gonzalez v. Nguyen, 243 Ariz. 531, 533, ¶ 8 (2018).

I. Application for Entry of Default

¶10 To comply with Arizona Rule of Civil Procedure (“Rule”)
12(a)(1)(A)(i), a defendant must file and serve an answer or other
responsive pleading within 20 days after being served with a summons and
complaint. Murphy does not contest she was properly served with a
summons and complaint on January 27, 2019. Instead, citing Rule 5(c)(2)(C),
which permits a party to serve a document by mail—“in which event
service is complete upon mailing”—Murphy argues Campbell could not
have known that she had failed to timely serve an answer or other responsive
pleading when he filed his application for entry of default on February 20,
2019 (due to a weekend and federal holiday, February 19, 2019 was the last
day for Murphy to timely respond). Therefore, his application was
premature and ineffective.

¶11 Our review on appeal is limited to those issues raised in
Campbell’s motion to set aside. Hirsch v. Nat’l Van Lines, Inc., 136 Ariz. 304,

3
 CAMPBELL v. MURPHY
Decision of the Court

311 (1983). By failing to raise the premature-application argument in the
superior court, Murphy waived the issue on appeal. Odom v. Farmers Ins.
Co. of Ariz., 216 Ariz. 530, 535, ¶ 18 (App. 2007) (“[A]rguments raised for the
first time on appeal are untimely and deemed waived.”). Even in the
absence of waiver, Murphy’s argument fails. The superior court “makes all
pleadings available to parties” through its electronic filing system. Because
a party must both serve and file an answer or other responsive pleading
within 20 days after being served with a summons and complaint, Ariz. R.
Civ. P. 12(a)(1)(A)(i), Campbell could have applied for entry of default
based solely on Murphy’s failure to file an answer or other responsive
pleading before February 20, 2019. More importantly, even extending five
additional calendar days for mailing, Murphy concedes that she did not
timely file an answer. See Ariz. R. Civ. P. 6(c) (adding five calendar days
when service is completed by mail).

¶12 As Campbell points out, the statutory scheme governing
default judgments guards against “premature” applications by imposing a
10-day delay before an application for entry of default becomes effective.
Ariz. R. Civ. P. 55(a)(4) (“A default is effective 10 days after the application
for entry of default is filed.”). In other words, had Murphy timely served
Campbell with an answer by mail under Rule 5(c)(2)(C), the application for
entry of default would have been ineffective. Ariz. R. Civ. P. 55(a)(5) (“A
default will not become effective if the party claimed to be in default pleads
or otherwise defends as provided in these rules within 10 days after the
application of entry of default is filed.”). On this record, Murphy’s claim
that the application for entry of default was premature and ineffective is
without merit.

II. Purported “Good Cause” for Relief

¶13 Under Rule 60(b), the court may relieve a party from a final
judgment based on: (1) mistake, inadvertence, surprise, or excusable
neglect; (2) newly discovered evidence that, with reasonable diligence,
could not have been discovered in time to move for a new trial; (3) fraud,
misrepresentation, or other misconduct of an opposing party; (4) a void
judgment; (5) a satisfied, released, or discharged judgment; or (6) any other
reason justifying relief. While the law favors deciding cases on the merits,
the “principle of finality in proceedings” must also “be recognized and
given effect.” Daou v. Harris, 139 Ariz. 353, 359 (1984). To set aside a default
judgment under Rule 60(b), a party must show: (1) it acted promptly in
seeking relief; (2) its failure to file a timely answer was excusable under one
of the six subdivisions of Rule 60(b); and (3) it had a meritorious defense.
Id. at 358-59.

4
 CAMPBELL v. MURPHY
Decision of the Court

¶14 Relying on Gonzalez, Murphy contends that Campbell
received an “unjust windfall” from the default judgment, which, alone,
justifies relief under Rule 60(b). In Gonzalez, the plaintiff obtained a default
judgment for $667,279.56 for injuries allegedly sustained during a low-
speed motor vehicle accident, notwithstanding that the contemporaneous
police report, which documented the accident, stated “no injury” had
occurred. 243 Ariz. at 532–33, ¶¶ 2–4. In their motion to vacate the default
judgment, the defendants admitted liability but contested the amount of
damages awarded. Id. at 533, ¶ 5. After the superior court granted the
motion to vacate the default judgment, concluding the damages award was
“too large” and damages should be “decided on the merits,” this court
reversed and reinstated the default damages award. Id. at ¶ 5–6. On review,
the supreme court expressly noted that the defendants relied “solely” on
Rule 60(b)(6), the catch-all provision, and did not argue “that any of the first
five Rule 60(c) grounds, including excusable neglect, applied.” Id. at 534,
¶ 10. Proceeding on that basis, the supreme court reversed this court’s
decision, holding that: (1) Rule 60(b)(6)’s requirement that a defendant
assert a meritorious defense imposes only a “minimal” evidentiary burden,
and (2) a defendant’s failure to satisfy the excusable neglect standard of
Rule 60(b)(1) does not preclude relief under Rule 60(b)(6). Id. at 534–35,
¶¶ 12, 15.

¶15 Murphy’s reliance on Gonzalez is inapposite. First, unlike the
defendants in that case, Murphy framed her motion to set aside the default
judgment squarely within the confines of Rule 60(b)(1), claiming her neglect
in responding to both the complaint and the default application were
excusable. Second, while the plaintiff in Gonzalez sought to reverse the
superior court’s exercise of discretion in granting Rule 60(b) relief, which
the supreme court denied, here, Murphy asks this court to reverse the
superior court’s denial of her motion for relief from judgment. As noted,
the superior court has broad discretion to grant or deny relief pursuant to
Rule 60(b), and we will not disturb the exercise of that discretion unless we
find an abuse of discretion.

¶16 Furthermore, although Murphy has abandoned her excusable
neglect argument on appeal, see DeElena v. S. Pac. Co., 121 Ariz. 563, 572
(1979) (issues not argued on appeal are deemed waived), and reframed her
request for relief under the catch-all provision of Rule 60(b), the grounds
for relief in each Rule 60(b) subsection “are separate and distinct.” Gonzalez,
243 Ariz. at 535, ¶ 15. In other words, each of the enumerated grounds
stands alone, and Murphy’s invocation of Rule 60(b)(1) in the superior court
did not preserve for appellate review a revised claim for relief predicated
on Rule 60(b)(6). See Hirsch, 136 Ariz. at 311; Odom, 216 Ariz. at 535, ¶ 18.

5
 CAMPBELL v. MURPHY
Decision of the Court

Therefore, Murphy waived her claim that Campbell received an “unjust
windfall from the default judgment,” justifying Rule 60(b)(6) relief absent
excusable neglect, by failing to raise it in the superior court. On this record,
the superior court did not abuse its discretion by finding Murphy’s failure
to timely answer the complaint was not excusable under Rule 60(b)(1).

CONCLUSION

¶17 For the foregoing reasons, we affirm the superior court’s
denial of Murphy’s motion to set aside the default judgment. Campbell
requests an award of attorney fees pursuant to A.R.S. § 12-341.01. In our
discretion, we award reasonable attorney fees and costs on appeal to
Campbell subject to his compliance with ARCAP 21(a).

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

6