High Desert v. Cec 141202761

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

HIGH DESERT HEALING, LLC, Plaintiff/Appellee,

v.

CEC 141202761, LLC, Defendant/Appellant.

No. 1 CA-CV 25-0653
FILED 08-20-2026

Appeal from the Superior Court in Maricopa County
Nos. CV2021-016161
CV2021-053708
The Honorable Erik Thorson, Judge

AFFIRMED

COUNSEL

Thorpe Shwer, PC, Phoenix
By Mitchell W. Fleischmann, Max K. Shanahan, Gaetano Forte
Co-Counsel for Plaintiff/Appellee High Desert Healing, LLC

Osborn Maledon, PA, Phoenix
By Eric M. Fraser, Michael Moorin
Co-Counsel for Plaintiff/Appellee High Desert Healing, LLC

Wolff Law, PLLC, Phoenix
By Jordan C. Wolff
Counsel for Defendant/Appellant CEC 141202761, LLC

HIGH DESERT v. CEC 141202761
Decision of the Court

MEMORANDUM DECISION

Judge Angela K. Paton delivered the decision of the Court, in which
Presiding Judge Michael S. Catlett and Judge Jennifer M. Perkins joined.

P A T O N, Judge:

¶1 CEC 141202761, LLC (“CEC”) appeals from the partial denial
of its motion for relief under Arizona Rule of Civil Procedure (“Rule”) 60
from an injunction issued against it in favor of High Desert Healing, LLC
(“High Desert”). For the following reasons, we affirm.

FACTS AND PROCEDURAL HISTORY

¶2 This case is secondary litigation from a case litigated and
appealed to this court. That case was decided in February 2024. High Desert
Healing, LLC v. CEC 141202761, LLC, 1 CA-CV 23-0195, 2024 WL 849700
(Ariz. App. Feb. 29, 2024) (mem. decision).

I. Original Litigation between High Desert and CEC

¶3 In March 2018, High Desert began leasing commercial
property from CEC. The lease term was 15 years and permitted High
Desert to operate a medical marijuana dispensary on the property. The
lease provided that High Desert may not assign the lease without CEC’s
consent and a $500 payment, but it also provided that CEC’s approval
would not be “unreasonably withheld, delayed or conditioned.”

¶4 In August 2021, High Desert informed CEC that High
Desert’s parent company was being acquired and requested consent to
assign the lease to the acquiring company, Trulieve. In its response, CEC
noted it would not consider the assignment request until it received the
$500 payment and expressed separate concerns about past due rent. High
Desert paid CEC $500 the next day.

¶5 A month later, CEC denied the assignment request, citing
“concerns that the additional locations and jurisdictions in which Trulieve
operates would” increase CEC’s “exposure to state and federal forfeiture
laws.” In its denial, CEC also said it was terminating the lease “effective
immediately” because High Desert failed to pay rent, failed to pay the
assignment fee, and improperly assigned the lease in 2019.

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¶6 High Desert sued CEC, seeking a declaratory judgment that
it had not breached the lease, but CEC moved to evict High Desert. After a
four-day bench trial, the court ruled in June 2022 that (1) High Desert did
not breach the lease, (2) CEC breached its obligation to approve the
assignment under the lease, and (3) CEC was obligated to approve the
assignment and could not evict High Desert.

¶7 After the trial, the parties litigated matters such as the form of
judgment and CEC’s request for additional findings of fact and conclusions
of law. But in the interim, CEC continued to send High Desert multiple
“Notice[s] of Breach of Lease,” alleging various breaches dating back to
2019.

¶8 High Desert responded to the notices with a cease and desist
letter, which it sent to CEC’s counsel of record. The letter informed CEC
that the notices were attempts to relitigate a case it had already lost and
demanded that CEC cease its harassment of High Desert with meritless
breach allegations. When CEC’s counsel of record did not respond to the
cease and desist, High Desert applied for an order to show cause regarding
the notices. CEC’s counsel of record withdrew from representation, and
attorney Mark Goldman filed a notice of appearance for CEC.

¶9 The court issued its final judgment in February 2023, which,
along with finalizing its June 2022 under advisement ruling, also ruled that
the notices of breach were invalid. CEC appealed, raising only one issue:
whether the court erred by failing to treat High Desert’s request for an
assignment as an improper “attempt” to assign the lease. CEC did not raise
this issue at trial.

II. The Instant Litigation

¶10 While CEC’s appeal was pending before this court, CEC
refused to consent to the assignment of the lease and continued to send
High Desert notices of breach. In February 2024, High Desert again
petitioned the superior court for an order that CEC appear and show cause
as to why CEC’s “ongoing demands and claims . . . should not be enjoined
in order to protect [High Desert] from continued ongoing harassment and
annoyance with invalid claims.” High Desert electronically served the
petition to CEC’s counsel of record, Mark Goldman, and mailed his office a
courtesy copy. CEC did not respond, and High Desert prepared a proposed
order granting relief, including an injunction against CEC, which the court
adopted in April 2024.

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¶11 In adopting that order, the court found that High Desert
“presented credible, admissible evidence” that (1) “CEC issued
correspondence falsely claiming that it had the right to charge to Plaintiffs
‘legal fees’ on account of supposed ‘unauthorized modifications’ to the
leased property, which . . . all occurred, . . . prior to the February 7, 2023
Judgment,” and (2) “CEC falsely raised issues of alleged building safety,
building code violations and unauthorized modifications . . . which
allegedly arose and supposedly were in existence prior to the February 7,
2023 Judgment.” The court elaborated that “[i]f CEC wished to raise th[ose]
issues . . . , then . . . it was required to do so, if at all, during the litigation of
this matter before the February 7, 2023[,] Judgment issued.” The court thus
enjoined CEC from claiming that there are “current or prior issue[s]” under
the lease, including “any building safety or building code” violations.

¶12 Eight months later, CEC moved for Rule 60 relief from the
injunction. CEC argued that (1) the injunction should not prevent it from
raising code and safety violations that occurred between June to September
2024, (2) the injunction should not prevent CEC from seeking attorneys’ fees
under the lease, (3) the injunction should be vacated because High Desert
did not disclose regulatory notices of code violations that postdated the
judgment, and (4) the court should vacate the injunction because CEC’s
previous failure to oppose it was caused by High Desert’s improper service
of the order to show cause petition. Regarding its improper service
argument, CEC argued that service on Mark Goldman was insufficient
because (1) he had been suspended from the practice of law for 30 days and
had not reappeared in the case after his suspension, and (2) Rule 5(c)(4)
required service directly on CEC, not on its counsel.

¶13 The court granted CEC’s Rule 60 motion in part and denied it
in part. The court rejected CEC’s improper service argument because
“Goldman was still CEC’s attorney of record” and Rule 5(c)(4) did not
apply because the judgment had not “become final after appeal.” The court
“granted” the motion in part by clarifying that “current” means issues
existing on or before February 7, 2023, and that CEC is not barred from
seeking fees under the lease. In other words, the court limited the scope of
the injunction to claims arising before the February judgment, so CEC could
still notify High Desert of issues that arose after the judgment. The court
denied all other relief. CEC timely appealed, and we have jurisdiction
pursuant to Arizona Revised Statutes (“A.R.S.”) Section 12-2101(A)(2),
(5)(b).

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DISCUSSION

¶14 CEC raises four issues on appeal. First, CEC argues that the
injunction is void because High Desert did not properly serve CEC the
order to show cause petition that led to the injunction. Second, CEC argues
that the injunction’s scope exceeds what is allowed by statute because it
enjoins CEC from asserting contract rights and code-safety issues. Third,
CEC argues the court misapplied claim preclusion doctrines, effectively
placing a gag order on CEC regarding High Desert’s alleged code
violations. Fourth, CEC argues the court abused its discretion in denying
relief under Rule 60(b)(3) because High Desert committed fraud on the
court in obtaining the injunction.

¶15 We review the court’s ruling on a Rule 60(b) motion for an
abuse of discretion. City of Phoenix v. Geyler, 144 Ariz. 323, 328 (1985); see
also Copeland v. Ariz. Veterans Mem’l Coliseum & Exposition Ctr., 176 Ariz. 86,
89 (App. 1993); Gorman v. City of Phoenix, 152 Ariz. 179, 182 (1987).

¶16 At the outset, we do not reach the merits of CEC’s argument
that the injunction exceeds what is allowed by law. “The scope of an appeal
from a denial of a Rule 60 motion is restricted to the questions raised by the
motion to set aside and does not extend to a review of whether the trial
court was substantively correct in entering the judgment from which relief
was sought.” Laveen Meadows Homeowners Ass’n v. Mejia, 249 Ariz. 81, 83, ¶
6 (App. 2020) (citation omitted). So even if we agreed with CEC that the
injunction was granted on dubious legal grounds, our review is limited to
the superior court’s partial grant and partial denial of CEC’s Rule 60(b)
motion. See id. Whether a judgment is legally correct is not grounds for
relief under Rule 60. We therefore do not consider the merits of CEC’s
argument that the superior court “exceeded its statutory authority” in
entering the injunction, or that the injunction misapplied claim preclusion
doctrines, and address only CEC’s challenges of the court’s refusal to grant
further Rule 60(b) relief.

I. High Desert properly served CEC.

¶17 CEC argues that the court erred in finding that High Desert
properly served the order to show cause petition. CEC argues that the
judgment had become final, so Rule 5(c)(4) required High Desert to serve
the order to show cause petition on CEC itself, not on its counsel of record,
Mark Goldman, rendering the injunction void under Rule 60(b)(4). CEC
thus argues that the court abused its discretion by refusing to vacate the
injunction for voidness.

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¶18 Although we review the court’s ruling on a 60(b) motion for
an abuse of discretion, supra ¶ 15, we review whether a judgment is void
for insufficient service de novo. See Sycamore Hills Ests. Homeowners Ass’n,
Inc. v. Zablotny, 250 Ariz. 479, 482, ¶ 6 (App. 2021). Rule 5(c)(1) provides:
“If a party is represented by an attorney, service under this rule must be
made on the attorney unless the court orders or a specific rule requires
service on the party.” Rule 5(c)(4), on the other hand, provides that “[a]fter
the time for appeal from a judgment has expired or a judgment has become
final after appeal, a . . . pleading requesting . . . enforcement of that
judgment must be served in the same manner that a summons and pleading
are served . . . .”

¶19 CEC’s argument that Rule 5(c)(4) controls here is unavailing.
CEC’s reading of Rule 5(c)(4) would render the clause “or a judgment has
become final after appeal” meaningless, because in no case would the case
become “final after appeal” before “the time for appeal from a judgment
has expired.” Here, the judgment did not become “final after appeal” until
December 26, 2024—ten months after High Desert filed the order to show
cause petition. Rule 5(c)(1) thus applies, and High Desert was not required
to serve CEC itself until the judgment became final after appeal.

¶20 CEC argues that, even if Rule 5(c)(1) applied, Mark Goldman
had been suspended from the practice of law for 30 days and had not
reappeared in this matter after his suspension ended. Under Arizona
Supreme Court Rule 72(b)(1), “[i]n the case of suspensions of sixty (60) days
or less, the suspended lawyer may choose,” but is not required, “to
associate with another lawyer . . . during the period of suspension” and is
only obligated “not to practice law during the period of suspension.” If the
suspended attorney and client associate with other counsel during the
attorney’s suspension, the suspended attorney shall, upon reinstatement,
“file either a notice of appearance as counsel of record and dissolve the
association, or move for leave to withdraw in the relevant matters.” Ariz.
R. Sup. Ct. 72(b)(1).

¶21 Here, CEC and Goldman did not associate with other counsel
during his 30-day suspension nor did he withdraw from representation of
CEC. And there is no rule requiring a suspended attorney to file a new
notice of appearance to “reappear” in matters after serving a suspension of
less than 60 days if the suspended attorney did not associate with another
attorney during the suspension period. Ariz. R. Sup. Ct. 72(b)(1). Goldman
therefore remained CEC’s counsel of record after his suspension.

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¶22 CEC maintains that Mark Goldman was not its counsel after
Goldman’s suspension and thus argues the injunction on CEC is “void for
lack of due process under Rule 60(b)(4).”

¶23 Due process requires only that High Desert’s method of
service was “reasonably calculated . . . to apprise” CEC of the filing. Malnar
v. Joice, 236 Ariz. 170, 172, ¶ 7 (2014) (citation omitted). “[T]he question of
actual receipt is immaterial.” Columbia Grp., Inc. v. Jackson, 151 Ariz. 86, 89
(App. 1985). Generally, compliance with the service method prescribed by
statute—here, Rule 5(c)(1)—“affords sufficient due process” when “the
statutory provisions in themselves indicate that there is reasonable
probability that if . . . complied with, the defendant will receive actual
notice.” Malnar, 236 Ariz. at 172, ¶ 7.

¶24 High Desert’s method of service was reasonably calculated to
apprise CEC of the order to show cause petition because High Desert
complied with the rules and did not know that service on CEC’s counsel of
record would be ineffective. And there is a reasonable probability that
service on CEC’s counsel of record would give CEC actual notice. See id.

¶25 Ultimately, the court did not err in finding that High Desert
properly served CEC. Even assuming error, any error is harmless because
CEC had the opportunity to raise issues—and, in fact, did raise issues and
create a supplemental record—challenging the injunction in its Rule 60(b)
motion, which the court held a hearing on. Epperson v. Indus. Comm’n, 26
Ariz. App. 467, 472 (1976) (finding defective service harmless in the absence
of any resulting prejudice from the defective service). The court thus did
not abuse its discretion by refusing to vacate the judgment on the grounds
that the injunction was void due to improper service.

II. CEC is not entitled to Rule 60(b)(1) relief because its failure to
respond to the show cause petition does not constitute “excusable
neglect.”

¶26 CEC next argues it is entitled to relief from the injunction
based on excusable neglect because it could not respond to the injunction
due to Goodman’s failure to apprise CEC of High Desert’s show cause
petition. CEC thus asserts that the court abused its discretion by refusing
to vacate the injunction under Rule 60(b)(1).

¶27 A party may be relieved from a final judgment upon a
showing of “mistake, inadvertence, surprise, or excusable neglect[.]” Ariz.
R. Civ. P. 60(b)(1). Neglect is excusable if the party’s actions “might be the
act of a reasonably prudent person in the same circumstances.” Ulibarri v.

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Gerstenberger, 178 Ariz. 151, 163 (App. 1993). And “[e]ach attorney of record
is responsible for keeping advised of the status of, and the deadlines in,
pending actions in which that attorney has appeared.” Ariz. R. Civ. P.
5.3(b).

¶28 CEC argues that its neglect in failing to respond to High
Desert’s show cause petition is excusable because it did not have actual
notice of the petition due to its attorney’s neglect. But we look to “the
neglect of the statutory agent” authorized to receive service, not the
“neglect of the principal itself” to determine whether neglect is excusable.
W. Coach Corp. v. Mark V Mobile Homes Sales, Inc., 23 Ariz. App. 546, 549
(1975). As explained above, Mark Goldman was CEC’s counsel of record
and remained authorized by rule to receive service on behalf of CEC. Supra
¶ 21. Goodman’s failure to inform CEC of the show cause petition and
proposed injunction was inexcusable. See W. Coach Corp., 23 Ariz. App. at
549 (“[W]here service had been made on a[n] . . . agent, and the agent failed
to notify his principal, through mere carelessness, . . . such a showing does
not constitute ‘excusable neglect but was indeed inexcusable neglect.’”
(citation omitted)).

¶29 Further, CEC’s own actions under the circumstances were not
reasonable. CEC claims that, by February 2024, CEC ended its relationship
with Goldman and knew that he was not properly communicating court
updates. Despite this knowledge, CEC did not inform the superior court or
High Desert’s counsel that communications with Goldman would not reach
CEC or otherwise move to have Goldman withdrawn as counsel. CEC’s
failure to have Goldman withdrawn as counsel, or to at least inform High
Desert that its counsel of record was not providing court updates, does not
constitute excusable neglect. See Ulibarri, 178 Ariz. at 163. The court thus
did not abuse its discretion by declining to vacate the injunction under Rule
60(b)(1).

III. CEC is not entitled to relief under Rule 60(b)(3) because the
injunction was not obtained by fraud.

¶30 CEC argues that the affidavits High Desert submitted
constituted fraud because they were “false or recklessly incomplete,” that
the false statements “were central to [High Desert’s] harassment theory,”
and that but for High Desert’s misrepresentations, the superior court would
not have entered the injunction. Specifically, CEC asserts that Koslow, a
High Desert executive, misrepresented that all code, safety, and permit
issues had been fully and finally resolved and that county officials had
confirmed there were no issues of any kind. High Desert responds that

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Koslow’s statements were accurate and that no evidence supports CEC’s
fraud claim. High Desert also points out that CEC did not provide the
transcript for the hearing on CEC’s Rule 60(b) motion.

¶31 The court may relieve a party from judgment, including an
injunction, if the injunction was granted due to “fraud . . . ,
misrepresentation, or other misconduct of an opposing party[.]” Ariz. R.
Civ. P. 60(b)(3). The party seeking relief under Rule 60(b)(3) “must show
the opponent’s misconduct by clear and convincing evidence.” Est. of Page
v. Litzenburg, 177 Ariz. 84, 93 (App. 1993) (citation omitted).

¶32 To the extent there are factual disputes between the parties
regarding this issue, we must resolve them in favor of upholding the court’s
decision because CEC did not provide the relevant transcripts from the Rule
60(b) hearing. See Baker v. Baker, 183 Ariz. 70, 73 (App. 1995). The only
evidence in the record which CEC points to as evidence of fraud are notices
and regulatory communications that were sent after Koslow submitted his
affidavit. The only document that predates Koslow’s affidavit was a notice
and order to comply sent by the Planning and Development Department of
the Code Compliance Division. But this notice was sent to CEC, not High
Desert, and there is no evidence that Koslow was aware of the notice at the
time he gave his affidavit.

¶33 High Desert was not sent the other notices and regulatory
communications until after Koslow submitted his affidavit. When evidence
was not in existence at the time the injunction was granted, that evidence
could not have influenced the court’s decision on whether to grant the
injunction. Cf. Boatman v. Samaritan Health Servs., 168 Ariz. 207, 212 (App.
1990). After resolving disputed facts in favor of upholding the court’s
decision, there is no evidence that Koslow misrepresented that code, safety,
and permit issues had been fully and finally resolved at the time he gave
his affidavit or that any such misrepresentation was material to the court’s
decision to grant the injunction. The court thus did not abuse its discretion
in denying Rule 60(b) relief on the grounds that High Desert obtained the
injunction through fraud.

IV. CEC is not entitled to relief under Rule 60(b)(6) because CEC
cannot show it suffered hardship due to extraordinary
circumstances.

¶34 CEC argues that if it is not entitled to relief under any other
subsection of Rule 60(b), then it is entitled to relief under Rule 60(b)(6). It
argues in its opening brief that its lack of notice and the severe

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consequences of the injunction constitute “extraordinary circumstances.”
Although CEC backs away from this argument in its reply brief and insists
it is not requesting relief on Rule 60(b)(6) grounds, because it adequately
raised this issue before the superior court and in its opening brief, we will
consider whether CEC was entitled to relief from the injunction under Rule
60(b)(6).

¶35 To obtain relief from judgment under Rule 60(b)(6) (allowing
for relief from a judgment for “any other reason justifying relief”), the
movant must show: (1) “a reason for setting aside the judgment other than
one of the reasons set forth in the preceding five clauses of [R]ule 60([b]);”
(2) “extraordinary circumstances of hardship or injustice justifying relief;”
and (3) a meritorious defense. Skydive Ariz., Inc. v. Hogue, 238 Ariz. 357, 364,
¶ 25 (App. 2015).

¶36 CEC sought relief from the injunction under Rule 60(b)(1), (3),
and (4). As detailed above, CEC was not entitled to any further relief than
that which was already granted under those subsections of the rule. CEC
did not seek relief under subsections (2) (newly discovered evidence) and
(5) (satisfaction of judgment), and from our review of the record, CEC was
not entitled to relief under those subsections either. Because relief is not
available under the other subsections of Rule 60(b), the first requirement for
relief under Rule 60(b)(6) is met.

¶37 But to obtain relief under Rule 60(b)(6), CEC must also
demonstrate “extraordinary circumstances of hardship or injustice
justifying relief.” The rules do not define what constitutes an extraordinary
circumstance, but this court has found such circumstances exist and can
justify vacating a judgment when a party’s counsel, who expressly
disavowed having client contact to obtain client consent, enters into a
stipulation on behalf of that client resulting in a judgment for nearly the
entire amount of the plaintiff’s claim sought in the complaint.
Williamsfield/Higley L.P. v. Stren, 1 CA-CV 18-0322, 2020 WL 628731, *5, ¶ 28
(Ariz. App. Feb. 11, 2020) (mem. decision). This court has also found
extraordinary circumstances exist when a court granted a stay of summary
judgment while a defendant was on active duty in the military, but after a
change in judge, the court granted and entered summary judgment against
him while he was still on active duty. Skydive Ariz., Inc., 238 Ariz. at 364, ¶
27. But “a client whose attorney has abandoned him” and fails to
participate in litigation is not entitled to Rule 60(b)(6) relief. Panzino v. City
of Phx., 196 Ariz. 442, 444, ¶ 1 (2000), abrogated on other grounds by Gonzalez
v. Nguyen, 243 Ariz. 531 (2018).

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¶38 Here, CEC identifies “the combination of suspension, lack of
actual notice, and the permanent consequences of the injunction” as the
extraordinary circumstances requiring relief. We disagree. Of note, based
on the facts in Parker Law Team, PLLC v. CEC 141202761, LLC, no later than
October 2023, Scott Ayers, CEC’s sole member and manager had received
court filings and rulings, indicating that Goldman was no longer defending
the litigation in that case and had been suspended from the practice of law.
1 CA-CV 25-0176, 2025 WL 3240167, **1-2, ¶¶ 7-8 (Ariz. App. Nov. 20, 2025)
(mem. decision).

¶39 In Parker Law Team, “Ayers admitted that, “beginning in
October 2023, he and CEC ‘did, in fact, receive court filings in this matter
after the [c]ourt ordered counsel for Parker Law Team, PLLC to send them
directly to [CEC’s] . . . statutory agent.’” Id. at *2, ¶ 8. Ayers added that
Goldman “continued to actively mislead me and CEC by providing
assurances that he was addressing all matters in the litigation and had
everything under control in the litigation.” Id. Despite knowing that
Goldman was not providing adequate communication regarding case
statuses, CEC took no affirmative steps to ensure it was staying up to date
with court filings in this case or to inform High Desert that Goldman was
no longer authorized to receive documents on CEC’s behalf.

¶40 We also note that this court held in Parker Law Team that an
attorney’s abandonment of a client, without more, does not meet Rule
60(b)(6)’s “extraordinary circumstances” requirement. Id. at ¶ 12; see also
Panzino, 196 Ariz. at 448, ¶ 21 (“We simply cannot adopt a rule that
encourages lawyers, once their misconduct or inattention has made
successful representation of a client unlikely, to abandon the client so that
the client can later seek relief under” Rule 60(b)(6).). We see no reason to
depart from that reasoning here. There is a reasonable basis for the superior
court’s refusal to vacate the judgment as a form of relief under Rule 60(b)(6).
Cf. Sears Roebuck & Co. v. Walker, 127 Ariz. 432, 437 (App. 1980).

¶41 Both parties request their reasonable attorneys’ fees and costs
on appeal pursuant to Arizona Rule of Civil Appellate Procedure
(“ARCAP”) 21, Section 12-341.01(A), and the fee-shifting provision in the
parties’ lease agreement. Because CEC has not prevailed, we deny its
request. We grant High Desert its reasonable attorneys’ fees and, as the
prevailing party, its costs, upon compliance with ARCAP 21.

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CONCLUSION

¶42 We affirm.

MATTHEW J. MARTIN • Clerk of the Court
FILED: JR

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