Opinion
2 CA-CV 2023-0102
12-21-2023
Pine Valley One Real Estate, LLC, Plaintiff/Appellee, v. Carlos A. Montano, an individual, Defendant/Appellant.
Kessler Law Group, Scottsdale By Ryan E. Kessler and Eric W. Kessler Counsel for Plaintiff/Appellee Chaidez Law Firm PLLC, Phoenix By Jose L. Chaidez Counsel for Defendant/Appellant
Not for Publication - Rule 111(c), Rules of the Arizona Supreme Court
Appeal from the Superior Court in Pinal County No. S1100CV202202048 The Honorable Robert Carter Olson, Judge
Kessler Law Group, Scottsdale By Ryan E. Kessler and Eric W. Kessler Counsel for Plaintiff/Appellee
Chaidez Law Firm PLLC, Phoenix By Jose L. Chaidez Counsel for Defendant/Appellant
Presiding Judge Eppich authored the decision of the Court, in which Chief Judge Vasquez and Judge Sklar concurred.
MEMORANDUM DECISION
EPPICH, PRESIDING JUDGE
¶1 Carlos Montano appeals from the superior court's entry of default judgment against him foreclosing his interest in his former property. He asserts the court lacked jurisdiction to enter the judgment because he was not properly served with notice of the action. For the following reasons, we affirm.
Factual and Procedural Background
¶2 We view the facts in the light most favorable to upholding the superior court's ruling. Cf. Ezell v. Quon, 224 Ariz. 532, ¶ 2 (App. 2010) (reviewing ruling on motion to set aside default judgment). In November 2022, Pine Valley One Real Estate LLC filed a complaint to foreclose Montano's interest in his property on the basis that more than three years had passed since its purchase of a tax lien on the property. Pine Valley's return of service reflects that it served Montano with the complaint, summons, and certificate of compulsory arbitration in December by "substitute" service on his "sister/co-occupant" at his "usual place of [a]bode." Montano failed to answer the complaint or otherwise appear in the action.
The complaint also named the Pinal County Treasurer, who filed an answer affirming that the tax lien had not been redeemed and that more than three years had passed since the sale of the lien.
¶3 In February 2023, Pine Valley applied for entry of default against Montano. In its application, Pine Valley avowed it had mailed a copy of the application to Montano's last known address-the same address where Montano had been served. After a hearing, the superior court concluded default had correctly been entered and found "good service on Carlos Montano on December 23rd, 2022, and through substitute service" on his sister. The court then entered a default judgment foreclosing Montano from redeeming the property and barring him "from having or claiming any right or title adverse" to that of Pine Valley. It additionally quieted title in favor of Pine Valley. This appeal followed.
Jurisdiction
¶4 Pine Valley appears to challenge our jurisdiction to review Montano's appeal because "[a] party against whom a Default Judgment was entered must first seek relief under Rule 60(b)," Ariz. R. Civ. P. "Generally, a default judgment is not appealable. Rather, only an order setting aside or refusing to set aside the judgment is appealable." Kline v. Kline, 221 Ariz. 564, ¶ 11 (App. 2009). However, a direct appeal from a default judgment is permissible if there is a question regarding personal jurisdiction or the judgment's validity pursuant to Rule 55, Ariz. R. Civ. P. Id.; see also Hirsch v. Nat'l Van Lines, Inc., 136 Ariz. 304, 311 (1983).
¶5 On appeal, Montano argues the superior court lacked personal jurisdiction to enter the default judgment against him because service of process was improper. He also asserts Pine Valley did not properly give him notice of the application for default under Rule 55. "Proper, effective service on a defendant is a prerequisite to a court's exercising personal jurisdiction over the defendant," Bank of N.Y. Mellon v. Dodev, 246 Ariz. 1, ¶ 29 (App. 2018) (quoting Barlage v. Valentine, 210 Ariz. 270, ¶ 4 (App. 2005)), and "Rule 55 allows the entry of default only upon adequate notice to the defaulting party," Champlin v. Bank of Am., N.A., 231 Ariz. 265, ¶ 10 (App. 2013). Therefore, we have jurisdiction to consider Montano's appeal despite his failure to move for relief from the default judgment. See Kline, 221 Ariz. 564, ¶ 11; A.R.S. §§ 12-120.21, 12-2101(A)(1).
Discussion
¶6 Montano asserts the superior court erred by finding him in default because Pine Valley had failed to serve him at the property subject to the complaint, which he asserts "would have been" his residence. He alleges Pine Valley was "well aware" of this address and ultimately contends he had no notice of the proceedings. Pine Valley counters that it properly served Montano with the complaint and provided notice of the application for default. It further argues that because Montano failed to raise these issues below, there is no record supporting his claims. Whether service was proper and, thus, whether a court had personal jurisdiction over a defendant, is a legal question that we review de novo, but we defer to a superior court's factual findings unless clearly erroneous. Ruffino v. Lokosky, 245 Ariz. 165, ¶ 9 (App. 2018); see also BYS Inc. v. Smoudi, 228 Ariz. 573, ¶ 18 (App. 2012) (alleged void judgment reviewed de novo).
¶7 As relevant here, service of a tax-lien foreclosure complaint on an individual may be completed by: "delivering a copy of the summons and the pleading being served to that individual personally" or "leaving a copy of each at that individual's dwelling or usual place of abode with someone of suitable age and discretion who resides there." Ariz. R. Civ. P. 4.1(d)(1), (2); see also Advanced Prop. Tax Liens, Inc. v. Othon, 255 Ariz. 60, ¶¶ 23, 25 (2023); Ritchie v. Salvatore Gatto Partners, L.P., 223 Ariz. 304, ¶ 8 (App. 2010). In addition, Rule 55(a)(3) requires a party to give notice that it is seeking a default. A copy of the default application must be mailed to the party alleged to be in default if the party requesting its entry "knows the whereabouts of the party claimed to be in default." Ariz. R. Civ. P. 55(a)(3)(A).
¶8 "Regarding default judgments, the general rule is that if a court had no jurisdiction because of lack of proper service on the defendant, any judgment would be void." Othon, 255 Ariz. 60, ¶ 24 (quoting Wells v. Valley Nat'l Bank of Ariz., 109 Ariz. 345, 346 (1973)). A void judgment must be vacated, but the movant still bears the burden of demonstrating the judgment should be vacated. Blair v. Burgener, 226 Ariz. 213, ¶ 7 (App. 2010); see also Gen. Elec. Cap. Corp. v. Osterkamp, 172 Ariz. 185, 189-90 (App. 1992) (party seeking to set aside judgment based on Rule 55 bears the burden). Service of process may only be impeached by clear and convincing evidence, and we do not substitute our judgment for that of the superior court on disputed facts. Hilgeman v. Am. Mortg. Secs., Inc., 196 Ariz. 215, ¶ 14 (App. 2000). Moreover, we only consider matters in the record before us, and if the matter is not in our record, "we presume that the record before the [superior] court supported its decision." Ashton-Blair v. Merrill, 187 Ariz. 315, 317 (App. 1996).
¶9 Montano never sought to set aside the default judgment. While such a request was not required to obtain review of the issues he presents in this court, see Kline, 221 Ariz. 564, ¶ 11, Montano failed to develop any factual record before the superior court that service or notice had been defective, see Blair, 226 Ariz. 213, ¶ 7; Osterkamp, 172 Ariz. at 189-90. Consequently, he cites nothing in the record to support his factual assertions that Pine Valley was "well aware" that he was residing at the foreclosed property's address or that he lacked notice of the proceedings. See Ariz. R. Civ. App. P. 13(a)(7)(A) (opening brief must contain "appropriate references to the portions of the record on which the appellant relies"). Rather, the only relevant documents in the record are the return of service certifying that substitute service was made on Montano's "sister/co-occupant," "who is of suitable age and resides therein" while she was "within [Montano's] usual place of Abode" and Pine Valley's application for default certifying notice at Montano's "last known address." See Ariz. R. Civ. P. 4.1(d)(2); Ariz. R. Civ. P. 55(a)(3)(A); Cockerham v. Zikratch, 127 Ariz. 230, 233 (1980) (court reviews pleadings and affidavits filed when considering personal jurisdiction).
¶10 Montano contends the superior court should have inquired into these factual issues further before entering default, but does not acknowledge that it is his burden to show the judgment is void. See Blair, 226 Ariz. 213, ¶ 7; Osterkamp, 172 Ariz. at 189-90. And while a tax statement in the record shows the property was registered under his name, Montano points to no authority to support his suggestion that service of the tax-lien foreclosure complaint or notice of the default application must be made at the property's address. See Ritchie, 223 Ariz. 304, ¶ 8 (tax-lien foreclosure complaint served pursuant to Rule 4.1); Ariz. R. Civ. P. 4.1(d)(1), (2) (providing for personal service or service at "dwelling or usual place of abode with someone of suitable age and discretion who resides there"); Ruiz v. Lopez, 225 Ariz. 217, ¶ 15 (App. 2010) (Rule 55 "contemplates the possibility of mailing a notice to some other 'place' where the party can be found"). Thus, on the record before us, we cannot determine that the court erred when it concluded that default was properly entered and that there was "good service on Carlos Montano on December 23, 2022, and through substitute service" on his sister.
¶11 Montano requests his costs incurred on appeal. Because he is not the prevailing party, we deny his request. See A.R.S. § 12-342(A).
Disposition
¶12 For the foregoing reasons, we affirm.