Articles Posted in Civil Procedure

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A defendant need not submit additional evidence outside the existing record to establish a “meritorious defense” in a motion to set aside a default judgment under Ariz. R. Civ. P. 60(c) (now 60(b)), and a trial court has broad discretion to determine whether a matter should be decided on the merits. In the instant case, after a hearing at which Plaintiff presented evidence and Defendants failed to appear, the trial court entered a default judgment. Defendants filed a Rule 60(c) motion to vacate the damage award. The trial court granted the motion on the grounds that the record suggested that the judgment amount was excessive. The court of appeals reversed and reinstated the default damages judgment, concluding that Defendants had no presented a “meritorious defense” to support the motion. The Supreme Court vacated the court of appeals’ decision and affirmed the trial court’s order, holding (1) evidence outside the extant record is unnecessary to establish the meritorious defense supporting the motion to vacate; and (2) although a possibly excessive judgment does not automatically entitle a defendant to vacate a default judgment, the trial court in this case acted within its discretion. View "Gonzalez v. Nguyen" on Justia Law

Posted in: Civil Procedure

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The Superior Court of Navajo County erred when it denied Defendants’ motion for change of venue in this legal malpractice action filed by a Hospital located in Navajo County against a professional limited liability company (PLLC) organized in Maricopa County and its attorneys, both Maricopa County residents. After the Hospital sued, Defendants moved to transfer venue to Maricopa County, arguing that venue in Navajo County was improper unless a statutory exception applied under Ariz. Rev. Stat. 12-401. The trial court denied the motion, finding that venue in Navajo was proper under section 12-401(5) because the Hospital “exclusively contracted business in Navajo County,” and under section 12-401(18), reasoning that LLCs should be considered corporations for venue purposes. The Supreme Court reversed, holding (1) the PLLC was not required, expressly or by necessary implication, to perform in Navajo County; and (2) the trial court erred when it applied the subsection (18) exception on the basis that LLCs, like corporations, are amenable to veil-piercing, where venue and the alter-ego doctrine reflect different policy considerations. View "Butler Law Firm, PLC v. Honorable Robert J. Higgins" on Justia Law

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Ariz. Rev. Stat. 16-957(B)’s fourteen-day time limit for an appeal of a Citizens Clean Elections Commission penalty decision applies when the appellant challenges the Commission’s personal and subject-matter jurisdiction. The Commission in this case found probable cause to believe that Legacy Foundation Action Fund violated the Citizens Clean Elections Act, Ariz. Rev. Stat. 16-940 to -961 and thus assessed a civil penalty. Eighteen days after the Commission’s final decision, Legacy filed an appeal in the superior court. The superior court dismissed the appeal because it was not filed within fourteen days of a final Commission penalty decision as required by section 16-957(B). The Supreme Court affirmed, holding that the superior court correctly dismissed the appeal. View "Legacy Foundation Action Fund v. Citizens Clean Elections Commission" on Justia Law

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An order granting or denying a motion filed pursuant to Rule 85(A) of the Arizona Rules of Family Law Procedure is a special order made after final judgment under Ariz. Rev. Stat. 12-2101(A)(2), which confers jurisdiction on the court of appeals to decide whether the ruling was correct. Petitioner filed a motion pursuant to Rule 85(A) to correct a clerical error in a judgment. Specifically, Petitioner moved to replace a qualified domestic relations order (QDRO) with one that complied with the dissolution decree between him and his wife. The family court denied the motion, concluding that the decree and QDRO were clear and unambiguous because no appeal had been taken. Petitioner appealed. The court of appeals dismissed the appeal for lack of jurisdiction, concluding that Petitioner’s motion failed to assert any issues that could not have been raised in a timely appeal from the QDRO. The Supreme Court vacated the court of appeals’ decision, holding that the court of appeals had jurisdiction to decide whether the family court correctly denied Petitioner’s Rule 85(A) motion. View "Vincent v. Shanovich" on Justia Law

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At issue in this medical malpractice action was Ariz. R. Evid. 615 and the proper remedy for technical Rule 615 violations. Rule 615 generally provides that a trial court, at a party’s request, must order witnesses excluded so that they cannot hear other witnesses’ testimony. The Supreme Court held that Rule 615, when invoked, prohibits a party from providing prospective trial witnesses with transcripts of prior witnesses’ trial testimony. The court further held (1) a violation of this prohibition is not presumptively prejudicial in a civil action, but even when no prejudice is shown, the trial court must take some corrective action by fashioning an appropriate remedy under the circumstances; and (2) although expert witnesses are not automatically exempt from the Rule, a trial court must permit a witness to hear (or read) a prior witness’s testimony if a party shows that such an exception is essential to that party’s claim or defense. View "Spring v. Bradford" on Justia Law

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Under Ariz. R. Civ. P. 15(c), an amended complaint naming a new defendant relates back to the original complaint if the newly added defendant knew or should have known the plaintiff mistakenly failed to name him or her as a party in the original complaint. Dianne Flynn, who was injured in a car accident with Sarah Campbell, sued Campbell’s insurance carrier, State Farm Mutual Automobile Insurance Company, requesting compensatory damages and punitive damages. State Farm moved to dismiss the complaint on the basis that, in Arizona, there is no right of direct action against an insurance carrier for damages claimed as a result of an accident with one of its insureds. Flynn then filed an amended complaint removing State Farm and naming Campbell. Campbell moved to dismiss the amended complaint, arguing that it did not “relate back” under Rule 15(c) and was therefore time-barred. The superior court dismissed the amended complaint. The Supreme Court reversed, holding that Flynn’s mistake was cognizable under Rule 15(c) as a mistake concerning the identity of the proper party. View "Flynn v. Campbell" on Justia Law

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Although a trial court should be circumspect when modifying a jury verdict, the court nonetheless may do so if it states the Ariz. R. Civ. P. 59(a) or (i) grounds for the order and explains its ruling with sufficient particularity to avoid speculation as to its order of a conditional new trial or additur or remittitur. After a jury trial in this personal injury case, Michael Soto was awarded $700,000. Defendants moved for a new trial, or to alter or amend the judgment, and for remittitur under Rule 59, requesting that Michael’s award be reduced. The trial court granted a remittitur pursuant to Rule 59(i) and reduced Michael’s award to $250,000. The Supreme Court affirmed the trial court’s order conditionally granting a new trial and remanded the case for further proceedings, holding that Defendants carried their burden of establishing that the trial court’s remittitur and new trial order was supported by substantial evidence and was not an abuse of discretion. View "Soto v. Sacco" on Justia Law

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Martha and Mario Madrigal sued the City of Mesa. After the case was settled by the Madrigals’ second attorney, Raymond Slomski, the Madrigals’ first attorney, Edward Fitzhugh, assigned his rights under the parties’ contingent fee agreement to Al Carranza. Carranza later sued the Madrigals (“the fee-collection action”). The Madrigals subsequently divorced pursuant to a decree that allocated the remaining funds from the as-yet-unresolved fee-collection action. Mario and Carranza then entered into a settlement agreement that called for a portion of the disputed funds to be released to Mario and Carranza. The superior court approved the agreement. Slomski filed an interpleader action contesting the settlement. Thereafter, Martha successfully moved to set aside the order approving the settlement. Carranza then moved to substitute Fitzhugh as the real party in interest in both the fee-collection action and the interpleader action. The superior court denied the substitution request and court granted summary judgment in favor of Martha in the fee-collection action. The court of appeals affirmed summary judgment but reversed the denial of Carranza’s motion to substitute in the fee-collection action. The Supreme Court vacated in part, holding that the trial court did not abuse its discretion in denying the motions to substitute. View "Carranza v. Madrigal" on Justia Law

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Petitioners sued Respondents. Respondents, represented by counsel, made a settlement offer. The offer subsequently expired. Respondents’ counsel later extended a new settlement offer with terms that mirrored the prior offer. Petitioners’ attorney timely accepted the offer, and the trial court accepted the settlement (February 8 settlement). After Respondents’ attorney learned that he lacked authority to extend the settlement offer, he made a new settlement offer, which materially varied from the February 8 settlement. Petitioners moved to enforce the February 8 settlement. The trial court granted the motion, concluding that Respondents’ attorney had actual and apparent authority to extend the settlement offer and, alternatively, that Respondents were equitably estopped from disputing that authority. The court of appeals reversed, concluding that because Respondents’ assent to the agreement was not in writing, the requirements of Ariz. R. Civ. P. 80(d) were not met, and the agreement was unenforceable as a matter of law. The Supreme Court reversed, holding (1) because the parties in this case did not dispute the existence and terms of the February 8 settlement, Rule 80(d) did not apply; (2) even if Rule 80(d) applied, the agreement satisfied the rule; and (3) the agreement was enforceable because the attorney acted within the apparent authority given by his clients. View "Robertson v. Alling" on Justia Law

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Plaintiff filed a personal injury suit against Defendant, BCI Coca-Cola Bottling Co. BCI rejected Plaintiff’s offer of judgment to settle, and the case proceeded to trial. The jury rendered a verdict for Plaintiff and awarded her damages. The trial court entered a total award of $2,135,867, which included prejudgment interest under Ariz. R. Civ. P. 68(g) as a sanction against BCI for rejecting Plaintiff’s offer of judgment. At issue in this case was whether the prejudgment interest was interest on an “obligation” under Ariz. Rev. Stat. 44-1201(A) or interest on a judgment” under section 44-1201(B). The trial court concluded that the prejudgment interest awarded as a sanction pursuant to Rule 68(g) was interest on an “obligation,” thus entitling Plaintiff to the ten percent rate set forth in section 44-1201(A). The Supreme Court reversed, holding that the applicable rate for prejudgment interest under Rule 68(g) in this case was 4.25 percent based on section 44-1201(B). View "Metzler v. BCI Coca-Cola Bottling Co. of Los Angeles, Inc." on Justia Law