Tax Lein v. Beitman

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UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL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

TAX LIEN SERVICES, LLC, Plaintiff/Appellee,

v.

LEE M. BEITMAN, Defendant/Appellant.

No. 1 CA-CV 23-0676
FILED 07-23-2024

Appeal from the Superior Court in Maricopa County
No. CV2019-090996
The Honorable Brian Kaiser, Judge Pro Tempore

REVERSED AND REMANDED

APPEARANCES

Hymson Goldsten Pantilliat & Lohr, PLLC, Scottsdale
By John L. Lohr, Jr., Jackson D. Hendrix
Counsel for Plaintiff/Appellee

Lee M. Beitman, Phoenix
Defendant/Appellant
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MEMORANDUM DECISION

Judge D. Steven Williams delivered the Court’s decision, in which
Presiding Judge Michael J. Brown and Judge Daniel J. Kiley joined.

W I L L I A M S, Judge:

¶1 In this tax lien foreclosure action, Lee Beitman appeals the
superior court’s denial of his motion to set aside a default judgment entered
in favor of Tax Lien Services, LLC (“TLS”). For the following reasons, we
reverse the court’s ruling and remand for proceedings consistent with this
decision.

INTRODUCTION

¶2 Under Arizona’s statutory tax system, “a tax that is levied on
real or personal property is a lien on the assessed property.” A.R.S.
§ 42-17153(A). To “secure the payment of unpaid delinquent taxes,” the
county treasurer may sell tax liens. A.R.S. § 42-18101(A). Upon such a sale,
the county treasurer provides the purchaser with a certificate of purchase
“that ultimately may entitle the holder to a deed on the real property if
certain statutory conditions are met.” A.R.S. § 42-18118(A); Ritchie v.
Salvatore Gatto Partners, L.P., 223 Ariz. 304, 305, ¶ 2 (App. 2010). “The owner,
owner’s agent, assignee, or attorney, or any person with a legal or equitable
claim to the property, including the holder of a certificate of purchase, may
redeem the tax lien by paying the delinquent taxes, accrued interest, and
other statutory fees to the county treasurer.” Ritchie, 223 Ariz. at 305, ¶ 2;
A.R.S. §§ 42-18151, -18153. “If the tax lien is not redeemed within three years
of purchase, the purchaser of the lien may bring an action in superior court
to foreclose the property owner’s right to redeem.” Ritchie, 223 Ariz. at 305,
¶ 2; A.R.S. § 42-18201. “If the property is redeemed after the initiation of a
foreclosure action and ‘the person who redeems has been served personally
or by publication in the action,’ the redeemer must pay the lien holder’s
costs, including attorneys’ fees.” Ritchie, 223 Ariz. at 305, ¶ 2 (quoting A.R.S.
§ 42-18206).

FACTUAL AND PROCEDURAL HISTORY

¶3 Except as noted, the parties do not dispute the relevant facts.
Around 2016, TLS began the process of purchasing a tax lien on a parcel of

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real property in Phoenix (“the property”) that had unpaid property taxes.
In January 2019, TLS sent notices via certified mail to the owners of record
(Beitman and his deceased mother, Frances) of its intent to foreclose on the
property. The notices also advised that redemption payments could be
made to the county treasurer. The post office returned both notices to TLS,
however, informing that neither owner lived at the property and that no
forwarding address was known.

¶4 In March 2019, TLS filed a tax lien foreclosure complaint in
the superior court against Beitman and his mother. The following month,
TLS published notice of the summons and complaint in a local weekly
newspaper for four consecutive weeks. TLS then filed an affidavit of
publication with the court. Meanwhile, as detailed in signed declarations
submitted to the court, a certified process server repeatedly attempted
personal service on Beitman at Beitman’s last known mailing address, and
at two additional addresses discovered through “skip trace” and a search
of county assessor and motor vehicle department records.

¶5 In May, TLS moved the superior court to approve alternative
service by posting and mailing the summons and complaint to the property.
The court granted the request.

¶6 Thereafter, TLS notified the superior court that Beitman had
“intentionally avoided service of process,” recounting multiple attempts by
the certified process server at personal service. Given those unsuccessful
attempts, TLS posited that service by publication “was the best means
practicable” to provide notice of the foreclosure action.

¶7 In June, after the effective date of TLS’s service by publication,
but before the superior court granted TLS’s motion for alternate service, the
“tax lien on the property at issue [was] redeemed.” 1 At that point, having
completed service by publication, TLS filed a statement of costs and
affidavit of attorneys’ fees.

¶8 When Beitman failed to timely answer, TLS applied for entry
of default. When Beitman failed to respond to the application for default,

1 The appellate record does not reflect the circumstances of the
redemption payment. But as recounted in the opening brief, on June 9, 2019,
Beitman’s close friend, who maintained the property and managed
Beitman’s accounts during his incarceration, discovered a foreclosure
notice posted on the gate of the property and then promptly paid the
redemption fees using monies from Beitman’s account.

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the superior court entered a default judgment: (1) finding “good and proper
service ha[d] been completed,” and (2) awarding TLS attorneys’ fees of
$3,500 and costs of $1,079.70.

¶9 More than three years after entry of the default judgment, TLS
applied for a writ of general execution, requesting a sheriff’s sale of the
property to satisfy its money judgment. Two days later, in his first
appearance in the action, Beitman responded by: (1) objecting to the
application and (2) challenging the sufficiency of service, asserting he had
never been notified of the foreclosure action. In fact, Beitman had been
incarcerated from April 2014 until February 2023. Beitman also alleged that
TLS had “intentionally used [] service by publication [so he] would never
be notified.”

¶10 TLS, in turn, contended that its: (1) notice by publication was
“expressly permitted” under the procedural rules, and (2) attempts to
notify Beitman “apparently paid off” because someone had “redeemed the
delinquent taxes” on his behalf. Apart from asserting it had both exercised
due diligence and provided actual notice, TLS asked the superior court to
deny Beitman’s motion for relief as untimely.

¶11 After full briefing from the parties, the superior court denied
Beitman’s motion and ordered the writ of general execution. Beitman then
paid the money judgment and TLS filed a notice of satisfaction, prompting
the sheriff to vacate the levy on the property and cancel its sale.

¶12 Beitman then moved to set aside the default judgment under
Arizona Rule of Civil Procedure (“Rule”) 60(d)(3), alleging TLS had
committed fraud on the superior court through the certified process
server’s declarations documenting several purported attempts to effect
personal service. To support his fraud claim, Beitman submitted a minute
entry from a recent disciplinary court hearing that resulted in the
revocation of the certified process server’s license. The minute entry exhibit
reflects that: (1) the certified process server did not appear, (2) Beitman
testified as the sole witness, (3) the disciplinary court received into evidence
seven of Beitman’s exhibits, and (4) the disciplinary court found the
certified process server had “engaged in unprofessional conduct, exhibited
gross negligence, and willfully made or filed false reports or records in the
course of his profession.”

¶13 In response, TLS argued that: (1) the request for Rule 60 relief
was untimely, (2) Beitman had no meritorious defense to the underlying
judgment, (3) Beitman failed to produce any evidence that TLS had falsified

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“court records and filings,” and (4) Beitman “plainly received” actual notice
of the foreclosure action as evinced by the redemption of the tax lien.
Characterizing TLS’s evidentiary objections as “phishing,” Beitman
explained he would not disclose the exhibits he submitted to the
disciplinary court because he intended to use them against TLS in future
litigation. He reiterated, however, his contention that the disciplinary court
revoked the certified process server’s license because the process server had
falsified records in this case—asserting TLS was aware of the misconduct
and had “intentionally” used the false declarations of attempted personal
service to obtain authorization for alternative service.

¶14 After oral argument, the superior court denied Beitman’s
motion to set aside the default judgment finding that: (1) the motion was
untimely and (2) Beitman had “failed to meet his burden under Rule
60(d)(3).” Beitman timely appealed. We have jurisdiction under Article 6,
Section 9, of the Arizona Constitution, and A.R.S. §§ 12-120.21(A)(1) and
-2101(A)(1).

DISCUSSION

¶15 Beitman challenges the superior court’s denial of his motion
to set aside the default judgment. He contends the court should have
granted him relief because TLS: (1) committed fraud on the court through
the certified process server’s allegedly false declarations of attempted
personal service, and (2) never provided him valid service, so the default
judgment is void for lack of jurisdiction.

A. Compliance with ARCAP 13

¶16 TLS contends that Beitman’s opening brief fails to comply
with ARCAP 13, and that this deficiency provides sufficient grounds for
upholding the superior court’s ruling. ARCAP 13(a)(7)(A) requires an
opening brief to “present arguments that explain an appellant’s
‘contentions concerning each issue presented for review’ with supporting
reasons, citations to legal authorities, and appropriate references to the
record.” Ramos v. Nichols, 252 Ariz. 519, 522, ¶ 8 (App. 2022) (quoting
ARCAP 13(a)(7)(A)). When an appellant “fail[s] to provide a bona fide and
reasonably intelligent effort to comply with Rule 13,” this court may find
the appellant has “waived any issues he may have wished to submit for this
court’s review.” Id. at 522, ¶ 9.

¶17 Beitman’s briefing only partly complies with ARCAP 13(a)(7).
Though Beitman does provide some legal authority in support of his
arguments, he fails to adequately cite to the record. However, in our

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discretion, we do not treat this deficiency as a waiver of arguments but
instead opt to address Beitman’s claims to the extent they are discernable
and supported by explanation. See Delmastro & Eells v. Taco Bell Corp., 228
Ariz. 134, 137, ¶ 7 n.2 (App. 2011) (noting appellate court’s discretionary
authority to consider the merits of deficient briefs).

B. Void for Lack of Jurisdiction

¶18 Under Rule 60(b)(4), a “court may relieve a party or its legal
representative from a final judgment” when “the judgment is void.” “A
judgment or order is void if the court lacked jurisdiction over the subject
matter, over the person, or over the particular judgment or order entered.”
Master Fin., Inc. v. Woodburn, 208 Ariz. 70, 74, ¶ 19 (App. 2004).

¶19 “Without proper service, a court has no jurisdiction over a
party.” Angelica R. v. Popko, 253 Ariz. 84, 89, ¶ 14 (App. 2022). “If service
remains incomplete, or is defective, the court never acquires jurisdiction.”
Bank of N.Y. Mellon v. Dodev, 246 Ariz. 1, 10, ¶ 29 (App. 2018) (internal
quotations and citations omitted). Whether a party effected proper service
“is a legal question of personal jurisdiction which we review de novo.”
Ruffino v. Lokosky, 245 Ariz. 165, 168, ¶ 9 (App. 2018).

¶20 No time limit restricts relief under Rule 60(b)(4). Master Fin.,
Inc., 208 Ariz. at 74, ¶ 19. Indeed, a void judgment is “subject to attack at
any time,” Advanced Prop. Tax Liens, Inc. v. Othon, 255 Ariz. 60, 64, ¶ 20
(2023) (quotation and citation omitted), and a court must vacate it “even in
the case of unreasonable delay by the party seeking relief,”2 Master Fin., Inc.,
208 Ariz. at 74, ¶ 19. “Moreover, a party seeking relief from a void judgment
need not show that their failure to file a timely answer was excusable, that

2 TLS argues that Beitman has waived any claim that the default
judgment is void. Although Beitman did not move to set aside the default
judgment on Rule 60(b)(4) grounds, he challenged the validity of TLS’s
service in his motion to deny TLS’s application for writ of execution
—raising an argument that TLS repeatedly characterized in its response as
a claim that the default judgment was void for ineffective service.
Regardless, as noted, a void judgment “has no legal effect and may be set
aside or vacated at any time.” Shinn v. Ariz. Bd. of Exec. Clemency, 254 Ariz.
255, 262, ¶¶ 26–27 (2022) (internal quotation omitted) (explaining a
“judgment is void” and “subject to attack at any time,” including collateral
attack, if the superior court lacked jurisdiction over the “persons involved
in the litigation”).

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they acted promptly in seeking relief from the default judgment, or that
they had a meritorious defense.” Id.

¶21 Apart from asserting that the certified process server falsified
some, if not all, of the declarations of attempted service submitted to the
superior court, Beitman argues that TLS’s service of process was defective
because: (1) its service by publication neither complied with the governing
procedural rule nor the court’s order for alternative service, and (2) a
reasonable search would have revealed his incarceration.

¶22 A party seeking foreclosure on a tax lien may recover any
reasonable attorneys’ fees and costs incurred in the foreclosure action, even
if the tax lien is redeemed before a judgment is entered, “if the person who
redeems has been served personally or by publication in the action.” A.R.S.
§ 42-18206. The Arizona Rules of Civil Procedure govern “the proceedings
in an action to foreclose the right to redeem[.]” A.R.S. § 42-18203.

¶23 To effect personal service, a process server either delivers a
copy of the summons and complaint to the named party or leaves the
documents at that person’s residence with an individual of suitable age and
discretion who also resides there. Ritchie, 223 Ariz. at 307, ¶ 8 (citing Ariz.
R. Civ. P. 4.1(d)). Personal service ensures “that the named party receives
actual and timely notice of the action,” but under certain circumstances,
alternative service may be used. Id.

¶24 If a party shows that personal service is “impracticable,” the
court may “order that service may be accomplished in another manner,”
such as service by publication. Ariz. R. Civ. P. 4.1(k)(1). Service by
publication requires the publication of both “the summons and a statement
describing how a copy of the pleading being served may be obtained,” at
least once a week for four consecutive weeks, in a newspaper published in
the county where the action is pending. Ariz. R. Civ. P. 4.1(l)(2)(A).
Additionally, “[i]f the serving party knows the address of the person being
served, it must, on or before the date of first publication, mail to the person
the summons and a copy of the pleading being served, postage prepaid.”
Ariz. R. Civ. P. 4.1(l)(3). Service by publication is deemed effective “30 days
after the summons and statement is first published.” Ariz. R. Civ. P.
4.1(l)(2)(D).

¶25 Because service by publication does not reliably provide
actual, timely notice, a party “seeking to utilize service by publication must
demonstrate that personal service was either not practicable, because either
the person’s whereabouts in the state are currently unknown, or that [the]

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person was actively avoiding attempts to achieve personal service.” Ritchie,
223 Ariz. at 307, ¶ 8. Indeed, due diligence in attempting personal service is
a jurisdictional prerequisite to the entry of a default judgment upon service
by publication. Ariz. R. Civ. P. 4.1(l)(1)(C); Preston v. Denkins, 94 Ariz. 214,
222 (1963); see also Omega II Inv. Co. v. McLeod, 153 Ariz. 341, 342 (App. 1987).

¶26 Accordingly, service by publication predicated on false
representations is invalid, even if it complies with the technical procedural
requirements of Rule 4.1. See Preston, 94 Ariz. at 220. Stated differently,
service by publication confers no jurisdiction when the proffered
justification for alternative service is false. Id. Under such circumstances,
“every act” taken after the invalid service “is void and without effect and
should be set aside at the request of the party affected by it.” Id. at 220, 223
(“The jurisdiction of the court to enter any judgment must rest on the
affidavit in support of service by publication.”).

¶27 Here, TLS never personally served Beitman. As reflected in
the declarations submitted to the superior court, the certified process server
made only one attempt at personal service, on March 27, 2019, before TLS
arranged for publication of the summons and complaint in a local
newspaper beginning on April 5, 2019. Accepting, for the limited purpose
of this analysis, the veracity of the certified process server’s declarations, a
single attempt at personal service falls far short of the impracticability and
due diligence standards outlined in Rule 4.1. See Ariz. Real Est. Inv., Inc. v.
Schrader, 226 Ariz. 128, 130, ¶ 11 (App. 2010) (explaining that a single
attempt to serve the defendant was insufficient to establish impracticability
without evidence of evasion). Thus, service by publication in this case was
premature and not a method of last resort as dictated under the procedural
rules. Moreover, although the court granted TLS’s request for alternative
service—more than two months after TLS published the summons and
complaint in a newspaper—it never authorized service by publication.
Instead, the court ordered TLS to post a copy of the summons and
complaint at the property and mail the documents to Beitman “by certified
and regular first class mail.” See Andrews v. Ariz. R.C.I.A. Lands, Inc., 116
Ariz. 455, 457 (1977) (noting that certified mail is “a higher, more reliable
method of service” than regular mail). Nothing in the record reflects that
TLS complied with the court’s alternative service order requiring it to
provide notice of the summons and complaint by certified mail, regular
mail, and posting. State ex rel. Dep’t of Econ. Sec. v. Pennel, 1 CA-CV 23-0236
FC, 2024 WL 2827163, at *3, ¶ 16 (Ariz. App. June 4, 2024) (“Even assuming
alternative service was justified, Mother has not shown she complied with
the order for alternative service.”).

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¶28 “The purpose of process is to give the [defendant] actual
notice of the action filed against him and an opportunity to respond,”
thereby vesting the superior court with jurisdiction to resolve the matter.
Liberty Mut. Ins. Co. v. Rapton, 140 Ariz. 60, 62 (App. 1984). Relying on this
general principle, though failing to cite any supporting authority, TLS
asserts that even if it failed to comply with both Rule 4.1’s technical
requirements and the court’s alternative service order, the deficiencies do
not invalidate its service of process because Beitman admitted actual notice
of the summons and complaint—having acknowledged that his property
and accounts manager received notice of the documents through a posting
at the property.

¶29 “If service is not achieved according to the requirements of
the applicable procedural rule, it is technically defective[.]” Kline v. Kline, 221 Ariz. 564, 570, ¶ 21 (App. 2009). “But strict technical compliance with
rules governing service may be excused when the court has already
acquired jurisdiction over the receiving party and that party receives actual,
timely notice[.]” Id.

¶30 Here, Beitman never appeared in the superior court before
entry of the default judgment. More importantly, nothing in the record
suggests that Beitman appointed his friend as an agent authorized to accept
service of process on his behalf or otherwise handle legal matters. Cf. Barlage
v. Valentine, 210 Ariz. 270, 275, ¶ 17 (App. 2005) (concluding that the
defendant, by providing written authorization for a commercial
mail-receiving agency to accept restricted mail on her behalf, designated
the entity as “her actual agent,” authorized to accept service of certified
mail for service purposes). Instead, according to Beitman, he merely
authorized his friend to maintain the property and pay his bills during his
incarceration. Accordingly, there is no basis to impute the friend’s actual
notice of the foreclosure action to Beitman. Cf. Melton v. Superior Court, 154
Ariz. 40, 42 (App. 1987) (holding service of process upon a defendant’s
employer invalid despite the defendant’s admission that he had actual
knowledge—having received the served documents from his employer).

¶31 In sum, nothing in the record supports the finding that
Beitman received proper and effective service, either actual or constructive,
sufficient to confer jurisdiction over him. Given that jurisdictional defect,

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the default judgment is void and it was error to deny Beitman’s motion to
set it aside.3

CONCLUSION

¶32 For the foregoing reasons, we reverse the superior court’s
ruling on Beitman’s motion to set aside the default judgment and remand
for proceedings consistent with this decision. Both Beitman and TLS request
an award of attorney’s fees on appeal, each contending that the other party
brought or defended a claim without substantial justification. See A.R.S.
§§ 12-349, -2106. Beitman is not an attorney and represented himself. As
such, he is not entitled to an award of attorney’s fees. We deny both parties’
requests for attorney’s fees. Because Beitman is the prevailing party on
appeal, we award his taxable costs upon compliance with ARCAP 21.

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

3 Given our resolution of this issue, we need not address Beitman’s
alternative claim that the superior court should have granted his motion to
set aside the default judgment because TLS committed fraud on the court.

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