IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE OLIVE GREEN VILLAS HOMES ASSOCIATION, an Arizona non-profit corporation, Plaintiff/Appellant, v. SANTOS CRUZ, a single man, Defendant/Appellee. ______________________________________

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1 CA-CV 06-0651 DEPARTMENT E MEMORANDUM DECISION (Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure) Filed 10-02-07

Appeal from the Superior Court in Maricopa County

Cause No. CV 2004-000055 The Honorable Robert C. Houser, Judge AFFIRMED Carpenter Hazlewood, PLC Tempe

By James H. Hazlewood Javier B. Delgado Elise V. Saadi

Attorneys for Plaintiff/Appellant Law Offices of William R. Hobson Chandler

By William R. Hobson

and Counters & Koelbel, PC Chandler By Lisa J. Counters Attorneys for Defendant/Appellee N O R R I S, Judge

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¶1 Plaintiff/Appellant Olive Green Villas Homes

Association (“Olive Green”) appeals from the superior court’s

August 15, 2006, order vacating the judgment and decree of

foreclosure and order of sale entered in its favor and against

Defendant/Appellee Santos Cruz on March 10, 2004. Olive Green’s

main argument on appeal is that the superior court abused its

discretion by declaring the default judgment void for lack of

jurisdiction. For the reasons that follow, we disagree and

affirm the order of the superior court.

FACTS AND PROCEDURAL BACKGROUND

¶2 Cruz purchased a house in Glendale, Arizona in 1996.

He lived in the house with his wife, Estella Bastida,1 and their

children. Olive Green is a homeowner’s association which

provides services for Cruz. In return, Cruz was obligated to

pay assessments, fees, charges, costs, and expenses related to

these services pursuant to the Declaration of Covenants,

Conditions and Restrictions for Olive Green Villa Homes

Association (“Declaration”). Cruz evidently failed to pay

certain assessments, and, therefore, Olive Green recorded a lien

upon the house pursuant to Article IV of the Declaration and

Arizona Revised Statutes (“A.R.S.”) Section 33-1807 (2003).

1During a hearing, Cruz’s counsel noted Cruz and

Bastida were married by common law, and Arizona does not recognize common law marriage. Cruz and Bastida’s relationship is not at issue in this appeal.

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¶3 On January 2, 2004, Olive Green filed a complaint (the

“foreclosure lawsuit”) in the superior court asserting Cruz owed

$2,274.14, with interest continuing to accrue. Olive Green

sought to judicially foreclose and sell the house to satisfy the

lien. Cruz did not answer or otherwise respond to the

complaint. On March 10, 2004, the superior court entered a

default judgment against Cruz and ordered the property sold at a

public auction after the statutory redemption period. The court

also awarded Olive Green’s court costs and attorneys’ fees.

¶4 In April 2004, Olive Green’s attorneys sent a post-

judgment letter to Cruz. The letter stated a foreclosure

judgment had been entered against Cruz, disclosed the current

balance due on Cruz’s account ($5,111.53), and stated that if

Cruz failed to make arrangements for payment by April 15, 2004,

Olive Green would proceed with a sheriff’s sale.

¶5 Thereafter, on October 7, 2004, the Maricopa County

Sheriff’s department conducted a public auction of the house,

and Olive Green purchased the house by credit bid. It

subsequently assigned the title to Excess Equities, L.L.C.2 In

June 2005, a Sheriff’s Deputy evicted Cruz and his family from

their home. Cruz subsequently asserted in an under oath

declaration that he was “not aware of the foreclosure

2Excess Equities, L.L.C. is not a party to this appeal.

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proceeding, default judgment, Sheriff’s sale and Assignment of

Judgment” until he was personally served with a Glendale Justice

Court Summons and Forcible Detainer Complaint. He asserted he

first received the summons and complaint from the Sheriff’s

deputy when the deputy came to evict him. At that time, Cruz

was current on his mortgage payments, some eight months after

Olive Green purchased his house.3

¶6 On January 6, 2006, Cruz moved to set aside the

default judgment entered in the foreclosure lawsuit pursuant to

Arizona Rules of Civil Procedure 60(c)(1), (3), and (6), arguing

in pertinent part that he had never been notified of the lawsuit

or the Sheriff’s sale. In his supporting declarations, Cruz

asserted he had not received a copy of “any” summons or

complaint, notice of a pending default, notice that a default

had been entered or that he had a right redeem, or notice of the

Sheriff’s sale.

3We also note that on November 9, 2005, months after

the Sheriff’s deputy evicted Cruz and his family, Olive Green provided both a third and fourth notice, on the same day, that Cruz was violating Association rules by hanging a blanket over a window, and threatened to assess $300 in fees for the violation if not corrected within 10 days.

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¶7 In response, Olive Green asserted Cruz’s motion was

untimely under Rule 60(c),4 and that Cruz had been served with a

Summons and Complaint on January 10, 2004, relying on the

process server’s affidavit, which stated the Summons and

Complaint had been issued “upon Estella Bastida, wife,

personally, being of suitable age and discretion and residing

therein, at their usual place of abode, . . . Glendale, . . .

Arizona, . . . at the hour of 1:00 p.m., January 10, 2004.”

The affidavit listed Bastida’s weight as 160 pounds.

¶8 On February 10, 2006, Cruz replied, supplementing the

record with a second declaration as well as a declaration from

Bastida. Cruz and Bastida both asserted Bastida had not been

served with the Summons and Complaint. They stated they were

not home at the time the process server claimed to have served

Bastida; that it was their practice to visit Bastida’s parents

or otherwise be out of the house on Saturdays, and they would,

therefore, not have been home at the time listed on the

affidavit of service. Cruz and Bastida also asserted the

physical description of Bastida listed in the affidavit of

4Olive Green also filed a “Notice to Court Re:

Defendant’s Non-Compliance with ARCP Rule 19.” In that notice, Olive Green asserted Excess Equities, as the current owner of the house, was an indispensable party to the litigation. Cruz did not reply, and the superior court merely acknowledged during the April 7, 2006, hearing that it had received the Rule 19 notice, but the court never again referenced the document.

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service was incorrect. Both asserted that at the time of the

alleged service, Bastida weighed in excess of 200 pounds, while

the process server listed her weight as 160 pounds.

¶9 Cruz also requested an evidentiary hearing in his

reply, asserting it was necessary to fully develop relevant

evidence. At a subsequent hearing on April 7, 2006, Cruz’s

counsel informed the superior court that he wished to depose the

process server and the owner of Excess Equities. However, the

superior court questioned Cruz’s counsel as to what bearing

Excess Equities could have on whether process had been properly

served. Cruz’s counsel suggested Excess Equities may have been

“insiders,” and that the conveyance from Olive Green to Excess

Equities might have been fraudulent. The court later granted

Cruz leave to depose the process server and supplement the

motion.

¶10 Instead of deposing the process server, Cruz’s counsel

provided the court with a declaration from the process server.

In that declaration, the process server stated he had no

independent recollection of having served Bastida, that

reviewing the affidavit of service did not refresh his

recollection, and that he would not be able to add anything to

the affidavit of service if deposed. Cruz asserted in a

supplement to the motion that the process server must have

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served someone else, since Bastida weighed over 40 pounds more

than the person the process server described, and because

Bastida was not home at the time the process server claimed to

have served process.

¶11 At a second hearing, Cruz’s counsel withdrew his

request for an evidentiary hearing. During the hearing, the

court specifically asked Cruz’s counsel whether he was taking

the position that the judgment was void, and Cruz’s counsel

stated in the absence of proper service the judgment was void.

Olive Green did not request an evidentiary hearing before the

court ruled on the motion to set aside the default judgment, and

did not present any evidence, by affidavit or otherwise,

challenging the statements made by Cruz and Bastida in their

declarations.5

¶12 After considering the declarations of both Cruz and

Bastida, which asserted they were not home at the time the

process server claimed to have served Bastida, the incorrect

physical description of Bastida on the affidavit of service, and

Olive Green’s failure to provide controverting evidence, the

superior court concluded Cruz had raised “plausible” evidence

demonstrating Olive Green had failed to provide proper notice of

the foreclosure lawsuit to warrant relief pursuant to Rule

5Olive Green first requested an evidentiary hearing in

its motion for reconsideration.

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60(c)(4).6 That rule allows a court to relieve a party from a

final judgment if the judgment is void. By signed minute entry

entered on August 15, 2006, the court concluded:

On this record, the Court finds that service of process was not properly made on [Cruz], that the Court lacked jurisdiction over [Cruz] when the default judgment was entered and that the judgment was therefore void.

¶13 Olive Green moved for reconsideration on September 7,

2006. However, on September 14, 2006, before the court could

rule on this motion, Olive Green filed a notice of appeal from

the court’s August 15 ruling.

¶14 This court has jurisdiction over this appeal pursuant

to A.R.S. §§ 12-120.21(A)(1) (2003) and 12-2101(C) (2003).

DISCUSSION

¶15 The question before this court is whether the superior

court correctly found Cruz had established through clear and

convincing evidence that he had not been properly served with

the summons and complaint in the foreclosure lawsuit, and thus

the court lacked personal jurisdiction over him. We review a

decision to set aside a default judgment for an abuse of

discretion. Gen. Elec. Capital Corp. v. Osterkamp (“Gen. Elec.

I”), 172 Ariz. 191, 194, 836 P.2d 404, 407 (App. 1992). When

the superior court’s decision is based on disputed facts, “we

6The court determined Cruz had failed to show grounds

for relief pursuant to Rule 60(c)(1), (3), or (6).

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will not . . . substitute our judgment for that of the

[superior] court.” Gen. Elec. Capital Corp. v. Osterkamp

(“Gen. Elec. II”), 172 Ariz. 185, 188, 836 P.2d 398, 401 (App.

1992). We may find an abuse of discretion exists, however, if

the record fails to contain evidence to support the superior

court’s finding. Grant v. Ariz. Pub. Serv. Co., 133 Ariz. 434,

456, 652 P.2d 507, 529 (1982).

I. Service of Process

¶16 Although Cruz did not explicitly ask for relief under

Rule 60(c)(4) in his original motion or subsequent filings, he

and Bastida both asserted they had not been served with the

summons and complaint in the foreclosure lawsuit. Furthermore,

Cruz’s counsel argued at the August 8, 2006, hearing that the

judgment was void for failure to serve process on Cruz. Thus,

the court did not abuse its discretion by proceeding under Rule

60(c)(4).

¶17 A court does not acquire personal jurisdiction over a

person who is not properly served with the summons and

complaint, and the resulting default judgment is void. Sprang

v. Petersen Lumber, Inc., 165 Ariz. 257, 262, 789 P.2d 395, 400

(App. 1990); see also Martin v. Martin, 182 Ariz. 11, 15, 893

P.2d 11, 15 (App. 1994)(“judgment . . . is ‘void’ if the court .

. . lacked jurisdiction . . . over the person involved”)

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(internal citation omitted). When a judgment is void, the

“court has no discretion but to vacate” the judgment. Martin,

182 Ariz. at 14, 893 P.2d at 14; see also Barlage v. Valentine,

210 Ariz. 270, 272, ¶ 4, 110 P.3d 371, 373 (App. 2005). “There

is no time limit in which a motion under Rule 60(c)(4) may be

brought; the court must vacate a void judgment or order ‘even if

the party seeking relief delayed unreasonably.’” Martin, 182 at

14, 893 P.2d at 14 (quoting Brooks v. Consolidated Freightways,

173 Ariz. 66, 71, 839 P.2d 1111, 1116 (App. 1992)).

¶18 The superior court considered the declarations of Cruz

and Bastida, which controverted the process server’s affidavit

of service.7 Cruz and Bastida asserted they were not home at the

time the process server claimed to have served Bastida, and that

the process server could not have served her because he failed

to accurately describe her in his affidavit of service. Olive

Green provided no controverting evidence, and the process server

had no independent recollection of the service and could not

provide any additional information. We must, therefore,

determine whether the evidence provided to the superior court

7Pursuant to Arizona Rule of Civil Procedure 4.1(d),

process may be served on a person “by leaving copies thereof at that individual’s dwelling house or usual place of abode with some person of suitable age and discretion then residing therein . . . .” Here, it is undisputed that Bastida lived with Cruz in his dwelling and was a person of both suitable age and discretion.

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was “of a clear and convincing nature [sufficient] to overturn

the presumption of service.” Riggs v. Huachuca Inv. Co., 2

Ariz. App. 527, 529, 410 P.2d 149, 151 (App. 1966); see also

Gen. Elec. I, 172 Ariz. at 195, 835 P.2d at 407 (“Service of

process can be impeached only by clear and convincing

evidence.”).

¶19 Clear and convincing evidence – which requires

somewhat less than proof beyond a reasonable doubt8 - is “proof

that will produce in the mind of the trier of facts a firm

belief or conviction as to the issue sought to be proved.”

State v. Canez, 202 Ariz. 133, 156, 42 P.3d 564, 587 (2002)

(quoting State v. Turrentine, 152 Ariz. 61, 68, 730 P.2d 238,

245 (App. 1986)). Here, the superior court had declarations

from Bastida and Cruz, averring that Bastida was not at home

when the process server claimed to have served her, and that the

person the process server described in his affidavit of service

could not have been Bastida. The only contradicting evidence

8See State v. Leonardo, 161 Ariz. 111, 112, 776 P.2d

789, 790 (1989).

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was the process server’s affidavit of service,9 which described a

person over 40 pounds lighter than Bastida according to both

Cruz and Bastida. Thus, not only was the evidence “plausible,”

as stated by the superior court, but it constituted clear and

convincing evidence that Bastida was not served with the summons

and complaint, and, therefore, that Cruz was not properly served

process in the foreclosure lawsuit.

II. Other Arguments

A. Subsequent Notice of Default Judgment

¶20 Although both parties brief and argue matters that

occurred after the initial default judgment, none of those

issues are relevant to this appeal. Whether Cruz knew of the

9Olive Green asserts the superior court should have

accorded more weight to the process server’s affidavit of service because he was an expert and an officer of the court. We disagree. Even if “private process servers qualify as experts,” as asserted by Olive Green, the process server did not participate in this case as an expert witness. Pursuant to Arizona Rule of Evidence 702, an expert’s testimony is used to “assist the trier of fact to understand the evidence or to determine a fact in issue . . . .” Here, the process server’s affidavit was only relevant to show what he did in serving Bastida, and in no way assisted the superior court in understanding any evidence or determining a fact in issue. Furthermore, Olive Green provided no authority to support its assertion that an officer of the court’s testimony has more weight than that of any other person. Our established case law provides that a process server’s affidavit of service creates a presumption of service that can be rebutted through clear and convincing evidence. Huachuca Inv. Co., 2 Ariz. App. at 529, 410 P.2d at 151. Therefore, the superior court did not abuse its discretion in failing to accord more weight to the process server’s affidavit of service.

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default judgment after the court entered it has no bearing on

whether process was properly served. As such, we need not

address those arguments.

B. Timeliness of Motion to Set Aside

¶21 Olive Green argues on appeal that Cruz failed to bring

the motion within a reasonable amount of time. Although Olive

Green acknowledges “some case law in Arizona hold[s] that there

is no ‘reasonable’ time limitation under the Rule when a motion

‘under paragraph (c)(4)’ is brought[,]” it asserts the rule

itself fails to explicitly state that claims under subsection

(c)(4) are not subject to a reasonable time limitation.

¶22 This court has authority to interpret rules of

procedure under the Arizona Constitution, Article VI, Section 5.

Barassi v. Matison, 130 Ariz. 418, 421, 636 P.2d 1200, 1203

(1981). This court succinctly stated “[a]s for appellant's

contention that appellee did not move within a reasonable time

to set aside the judgment, such contention is without merit

since the reasonable time requirement of Rule 60(c) does not

apply when a judgment is attacked as void.” National Inv. Co.,

Inc. v. Estate of Bronner, 146 Ariz. 138, 140, 704 P.2d 268,

270 (App. 1985)(citing Springfield Credit Union v. Johnson, 123

Ariz. 319, 599 P.2d 772 (1979)). As such, Cruz’s motion to set

aside the judgment as void was not subject to a reasonable time

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limitation.

C. Evidentiary Hearing

¶23 Next, Olive Green asserted the superior court abused

its discretion by failing to conduct an evidentiary hearing.

There is no requirement that the court conduct such a hearing

before ruling on a motion to set aside a default judgment.

Furthermore, Olive Green failed to request an evidentiary

hearing before the court ruled on Cruz’s motion to vacate, and

only after it lost that motion did it request an evidentiary

hearing as part of its motion to reconsider. “[A] party must

timely present his legal theories to the trial court so as to

give the trial court an opportunity to rule properly.”

Airfreight Exp. Ltd. v. Evergreen Air Ctr., Inc., 215 Ariz. 103,

109, ¶ 17, 158 P.3d 232, 238 (App. 2007)(party waived issue when

they failed to raise it until after court dismissed the

action)(quoting Payne v. Payne, 12 Ariz. App. 434, 435, 471 P.2d

319, 320 (1970)). Because the superior court was never provided

with the opportunity to consider the merits of Olive Green’s

request for an evidentiary hearing, Olive Green has waived this

argument on appeal. See Schurgin v. AMFAC Elec. Distrib. Corp.,

182 Ariz. 187, 190, 894 P.2d 730, 733 (App. 1995)(issues raised

for first time on appeal are waived).

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D. Rule 19 Motion

¶24 Olive Green also asserted the superior court committed

error by failing to require Cruz to join Excess Equities as an

indispensable party pursuant to Arizona Rule of Civil Procedure

19. Olive Green argues that because Excess Equities owned the

property at the time Cruz filed his motion, it had a stake in

the matter and an interest in protecting its property. This

argument fundamentally misinterprets the purpose of Rule 19, and

is without merit.

¶25 When determining whether a party is indispensable, our

supreme court has held:

Indispensable parties are those who have such an interest in the subject matter that a final decree cannot be made without either affecting their interest or leaving the controversy in such condition that a final determination may be wholly inconsistent with equity and good conscience. The test of indispensability therefore is whether the absent person's interest in the controversy is such that no final judgment or decree can be entered which will do justice between the parties actually before the court, without injuriously affecting the rights of others not brought into the action.

Bolin v. Superior Court, 85 Ariz. 131, 134-35, 333 P.2d 295, 297

(1958) (emphasis added). Following the 1966 amendment of the

rule, this approach was further approved by our supreme court in

King v. Uhlmann, 103 Ariz. 136, 437 P.2d 928 (1968). Thus, the

purpose of Rule 19 centers on ensuring that the entry of a final

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judgment affords justice to the parties before the court along

with any parties not joined whose rights would be injuriously

affected if they were not joined.

¶26 A motion asserting a failure to join an indispensable

party normally includes a request that the court dismiss a

pending action to which indispensable parties have not been

joined. See F.D.I.C. v. Adams, 187 Ariz. 585, 589, 931 P.2d

1095, 1099 (App. 1996) (defendant moved to dismiss action

because plaintiff had failed to join shared loan holder, whom

defendant asserted was an indispensable party). Additionally, a

party may attack a final judgment by asserting the judgment is

void for failure to join an indispensable party. See, e.g., In

re Chase's Estate, 125 Ariz. 270, 274, 609 P.2d 85, 89 (App.

1980) (party may move to set aside judgment pursuant to Rule

60(c)(1) for failure to join an indispensable party). In each

situation, the indispensable party issue is raised to either

preclude or invalidate a final judgment.

¶27 Here, the default judgment was the final judgment.

The only “indispensable parties” to the foreclosure action

before the entry of the final judgment were Olive Green and

Cruz. Olive Green does not assert the entry of final judgment

deprived an indispensable party of equity or justice. Rather,

Olive Green asserts that failing to allow Excess Equities to

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respond to Cruz’s motion to set aside the judgment somehow

deprived Excess Equities of the ability to protect its interest

in the property. When the final judgment was entered, Excess

Equities had no interest in the property. Olive Green cites no

precedent or authority for its assertion that, pursuant to Rule

19, a party who had no interest in the action, while it was

pending, must be allowed to respond to a post-judgment motion

that seeks to invalidate a default judgment for failure to

properly serve process. Although a superior court may have

discretion to allow a third party to intervene in a post-

judgment Rule 60(c) proceeding, Rule 19 is not applicable here.10

The superior court did not commit error by failing to join

Excess Equities as a party.

E. Motion for Reconsideration

¶28 Olive Green additionally asserts the superior court

abused its discretion by failing to rule on its motion for

reconsideration. Well established case law provides that the

superior court is divested of jurisdiction upon the filing of a

notice of appeal, and may not thereafter rule on a pending

motion for reconsideration. See City of Phoenix v. Leroy's

Liquors, Inc., 177 Ariz. 375, 381, 868 P.2d 958, 964 (App.

1993)(citing Castillo v. Indus. Comm'n, 21 Ariz. App. 465, 467,

10We express no opinion as to whether Excess Equities

should be considered an indispensable party.

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520 P.2d 1142, 1144 (1974)).

¶29 Nevertheless, Olive Green asserts that, pursuant to

Arizona Rule of Civil Procedure 26(a), before this court placed

the case on its docket, Olive Green could have asked the court

to dismiss the appeal, which would have allowed the superior

court to vacate its August 15 ruling and conduct an evidentiary

hearing. Olive Green is correct in arguing it could have sought

dismissal of its appeal before this court placed the case on its

docket. However, it failed to seek dismissal of the appeal, and

thus the superior court was never in a position to vacate its

judgment, a request Olive Green made in its motion for

reconsideration. Indeed, the case cited by Olive Green in

support of its contention specifically states that following the

filing of an appeal, a superior court may “proceed with issues

not directly involved in, or the subject matter of [,] the

appeal . . . .” State v. O'Connor, 171 Ariz. 19, 22, 827 P.2d

480, 483 (App. 1992). Vacating the ruling on which the appeal

is based directly involves the subject matter of the appeal.

Therefore, the superior court did not abuse its discretion in

determining it was without jurisdiction to rule on Olive Green’s

motion for reconsideration.

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CONCLUSION

¶30 For the foregoing reasons, we affirm the superior

court’s order vacating the default judgment.

¶31 Both parties have requested an award of attorneys'

fees pursuant to A.R.S. §§ 12-341.01 (2003) and 33-1807 (Supp.

2006) and the Declaration of Covenants, Conditions, and

Restrictions for Olive Green. Neither party is yet a prevailing

party, and we accordingly deny their requests for fees without

prejudice. When the superior court determines the prevailing

party, however, the court may consider the fees incurred by the

prevailing party on appeal in determining whether and how much

to award as reasonable attorneys' fees.

¶32 Cruz is, however, the successful party on appeal and

has requested an award of costs on appeal. We therefore grant

his costs upon his compliance with Arizona Rule of Civil

Appellate Procedure 21.

_________________________ PATRICIA K. NORRIS, Judge CONCURRING: _____________________________________ PATRICK IRVINE, Presiding Judge ___________________________________ SHELDON H. WEISBERG, Judge

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