Opinion
No. 1 CA-CV 13-0340
06-17-2014
FRANK PENA and ELIS PENA, husband and wife, Plaintiffs/Appellees, v. LINO DE LA CRUZ and JENNY DE LA CRUZ, husband and wife, Defendants/Appellants.
Thomas N. Swift II, Mesa Counsel for Plaintiffs/Appellees Lino De La Cruz and Jenny De La Cruz, Miami, Florida In Propria Persona
NOTICE: NOT FOR PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION DOES NOT CREATE
LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED.
Appeal from the Superior Court in Maricopa County
No. CV2009-090409
The Honorable Bernard C. Owens, Judge Pro Tempore
AFFIRMED
COUNSEL
Thomas N. Swift II, Mesa
Counsel for Plaintiffs/Appellees
Lino De La Cruz and Jenny De La Cruz, Miami, Florida
In Propria Persona
MEMORANDUM DECISION
Judge Margaret H. Downie delivered the decision of the Court, in which Presiding Judge Kenton D. Jones and Judge Donn Kessler joined.
DOWNIE, Judge:
¶1 Lino and Jenny De La Cruz (collectively, the "De La Cruzes") appeal from the denial of their motion for Rule 60(c), Arizona Rules of Civil Procedure, relief. For the reasons that follow, we affirm.
BACKGROUND
¶2 The De La Cruzes owned and operated Cruz Auto Sales, Inc. in Chandler. Cruz Auto Sales obtained a loan from Frank and Elis Pena (collectively, "the Penas") in 2005 in exchange for a $125,000 promissory note ("First Note").
¶3 The De La Cruzes sold the assets of Cruz Auto Sales to the Penas' son. Upon repurchasing the assets, the De La Cruzes agreed to assume the balance of a second loan the Penas had made to Cruz Auto Sales. Lino De La Cruz signed a $39,000 promissory note, representing the second loan, on behalf of Cruz Auto Sales ("Second Note"). Lino De La Cruz also signed a personal guaranty.
¶4 After the De La Cruzes and Cruz Auto Sales failed to respond to a demand for payment, the Penas filed suit, seeking $107,968 owed under both notes. The Penas' attorney sent three copies of the summons and complaint by certified mail to each of the De La Cruzes and Cruz Auto Sales at a post office box in Miami, Florida. The Penas' attorney received return receipts signed by Lino De La Cruz for each of the defendants, which were attached to a Rule 4.2(c) affidavit of service. The Penas subsequently obtained a default judgment against all defendants.
¶5 The De La Cruzes moved for relief under Rules 55(c), 59(a), and 60(c), asserting mistake or excusable neglect because a Miami attorney erroneously told them service had to be made on them personally by a process server. They also argued the Penas had not served Jenny De La Cruz because "[h]er husband signed all the return cards."
¶6 The superior court ruled that the De La Cruzes and Cruz Auto Sales were not entitled to relief under Rules 55(c), 59(a), or 60(c). The De La Cruzes filed a timely notice of appeal. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(A)(2).
DISCUSSION
I. Excusable Neglect
¶7 A court may set aside a default judgment in accordance with Rule 60(c). Ariz. R. Civ. P. 55(c). We review rulings on motions to set aside for an abuse of discretion. Fry v. Garcia, 213 Ariz. 70, 72, ¶ 7, 138 P.3d 1197, 1199 (App. 2006).
¶8 Rule 60(c)(1) permits the superior court to relieve a party from a final judgment for "mistake, inadvertence, surprise or excusable neglect." To obtain relief, the movant must establish "(1) that it acted promptly in seeking relief from the default judgment, (2) that its failure to file a timely answer was excusable under one of the six subdivisions of Rule 60(c) . . . ; and (3) that it had a meritorious defense." Beal v. State Farm Mut. Auto. Ins. Co., 151 Ariz. 514, 517, 729 P.2d 318, 321 (App. 1986). We focus on the second requirement, which the superior court found dispositive.
¶9 The De La Cruzes base their claim of excusable neglect on erroneous legal advice they received from a Florida attorney. However, the fault of an attorney is attributable to the client. United Imports & Exports, Inc. v. Superior Court, 134 Ariz. 43, 46, 653 P.2d 691, 694 (1982). A party may obtain relief only when the attorney's refusal or failure to act is legally excusable. Id. Ignorance of the applicable rules of civil procedure does not qualify as excusable neglect. See Daou v. Harris, 139 Ariz. 353, 359, 678 P.2d 934, 940 (1984) (no excusable neglect based on attorney's advice client need not respond to lawsuits filed outside his county of residence); Gen. Elec. Capital Corp. v. Osterkamp, 172 Ariz. 185, 190, 836 P.2d 398, 403 (App. 1992) (ignorance of default rules not the type of excuse contemplated by Rule 60(c)); Liberty Mut. Ins. Co. v. Rapton, 140 Ariz. 60, 64, 680 P.2d 196, 200 (App. 1984) (misconception concerning rules for serving a party does not warrant relief from judgment).
¶10 The De La Cruzes rely on Treadway v. Meador, 103 Ariz. 83, 436 P.2d 902 (1968), Green Acres Trust v. London, 142 Ariz. 12, 688 P.2d 658 (App. 1983), aff'd in part, rev'd in part on other grounds, 141 Ariz. 609, 688 P.2d 617 (1984), and Martin v. Rossi, 18 Ariz. App. 212, 501 P.2d 53 (1972). Their reliance on these authorities is misplaced. In each of those cases,
clients received assurances that an attorney would take care of a matter, yet the attorney failed to follow through. Green Acres, 142 Ariz. at 16, 688 P.2d at 662; Martin, 18 Ariz. App. at 215, 501 P.2d at 56; Treadway, 103 Ariz. at 84, 436 P.2d at 903. In contrast, the Florida attorney never promised to take care of the Pena lawsuit for the De La Cruzes; rather, he advised them to ignore the summons and complaint unless personally served. The attorney's bad advice was not legally excusable and is not a basis for setting aside the default judgment. See Daou, 139 Ariz. at 359, 678 P.2d at 940; Liberty, 140 Ariz. at 64, 680 P.2d at 200. This determination obviates the need to consider the other elements necessary for relief under Rule 60(c).
II. Service on Jenny De La Cruz
¶11 The De La Cruzes alternatively argue the Penas never served Jenny De La Cruz. Rule 60(c)(4) offers relief when a judgment is void due to lack of proper service. We review the denial of Rule 60(c)(4) relief de novo. Ezell v. Quon, 224 Ariz. 532, 536, ¶ 15, 233 P.3d 645, 649 (App. 2010).
¶12 Rule 4.2(c) permits service of a summons and complaint on an out-of-state defendant by certified mail. The serving party must certify "that such papers were in fact received by the party as evidence [sic] by the receipt, a copy of which shall be attached to the affidavit." Ariz. R. Civ. P. 4.2(c). Contrary to the De La Cruzes' assertion, though, the rule does not require that the party to be served personally execute the receipt. Service may be valid when a party's agent signs the receipt. See Barlage v. Valentine, 210 Ariz. 270, 274-76, ¶¶ 14-20, 110 P.3d 371, 375-77 (App. 2005) (upholding service under Rule 4.2(c) when representative of UPS store signed receipt on behalf of mailbox owner).
¶13 The Penas' attorney's Rule 4.2(c) affidavit was "prima facie evidence of personal service of the summons and the pleading." See Ariz. R. Civ. P. 4.2(c). It thus raised a rebuttable presumption that the Penas properly served Jenny De La Cruz. See Barlage, 210 Ariz. at 277, ¶ 27, 110 P.3d at 378. To rebut that presumption, Jenny De La Cruz submitted a declaration stating that her husband "picked up my mail at my post office box in Miami, Florida." She "personally did not receive the papers in the mail" and "did not sign for them."
¶14 On this record, we find that Mrs. De La Cruz failed to rebut the presumption of proper service. The post office box address listed on the De La Cruzes' Opening Brief is the same address to which the Penas' attorney sent the summons and complaint. Jenny De La Cruz affirmed
that she receives her mail at that post office box. Lino De La Cruz picked up and signed for the summons and complaint addressed to Jenny De La Cruz, and no one asserts that he lacked authority to do so or that Jenny De La Cruz did not in fact receive the documents her husband retrieved. Cf. Rapton, 140 Ariz. at 62, 680 P.2d at 198 (1984) (where defendant actually receives notice of the action, requirements of service will be liberally construed). Indeed, the record establishes implied authority for Lino De La Cruz to pick up and sign for mail addressed to his wife. See Ruesga v. Kindred Nursing Ctrs. W., L.L.C., 215 Ariz. 589, 599, ¶ 35, 161 P.3d 1253, 1263 (App. 2007) (inferring an implied agency for wife who signed an alternative dispute resolution agreement on behalf of husband); see also Marshall v. Erie Ins. Exch., 923 N.E.2d 18, 22-23 (Ind. Ct. App. 2010) (upholding service on wife at post office box for couple's business even though an unidentified party signed the receipt); Fender v. Deaton, 503 S.E.2d 707, 710-11 (N.C. Ct. App. 1998) (holding attorney's affidavit of service by mail, coupled with receipt signed by spouse, established presumption of service that was not rebutted).
CONCLUSION
¶15 For the reasons stated, we affirm the superior court's denial of the De La Cruzes' motion to set aside. We award the Penas their reasonable attorneys' fees and costs pursuant to the First Note, contingent on their compliance with ARCAP 21.