Community Bank v. ABCDW

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES. See Ariz. R. Supreme Court 111(c); ARCAP 28(c); Ariz. R. Crim. P. 31.24 IN THE COURT OF APPEALS STATE OF ARIZONA DIVISION ONE ) COMMUNITY BANK OF NEVADA, a Nevada ) State Bank; FEDERAL DEPOSIT INSURANCE ) COMPANY, as Receiver for Community Bank ) of Nevada, ) ) Plaintiffs/Appellees, ) ) v. ) ) ) ABCDW, LLC, an Arizona limited ) liability company; VANDERBILT FARMS, ) LLC, an Arizona limited liability ) company; BRANDON D. WOLFSWINKEL, an ) unmarried man; and ASHTON A. ) WOLFSWINKEL, an unmarried man, ) Defendants/Appellants. ) _______________________________________ ) DIVISION ONE FILED: 10/20/2011 RUTH A. WILLINGHAM, CLERK BY: DLL 1 CA-CV 10-0753 DEPARTMENT E MEMORANDUM DECISION (Not for Publication - Rule 28, Arizona Rules of Civil Appellate Procedure) Appeal from the Superior Court in Maricopa County Cause No. CV 2009-022171 The Honorable Emmet J. Ronan, Judge AFFIRMED Holme Roberts & Owen, LLP By Morgan L. Hector and Brian M. Mueller Attorneys for Plaintiffs/Appellees Wright & Associates By Lawrence C. Wright and Los Angeles, CA Scottsdale Mesa Lee Allen Johnson, P.C. By Lee Allen Johnson Co-Counsel for Defendants/Appellants Tempe N O R R I S, Judge ¶1 ABCDW, LLC and co-Defendants/Appellants 1 its (collectively referred to as ABCDW ) timely appeal from the superior court s order reinstating Community Bank of Nevada s case on the active calendar. discretion in reinstating ABCDW argues the court abused its the case because Community Bank s counsel failed to exercise diligence to stay informed of the status of its dismissed. case For the and, through following neglect, reasons, we allowed hold it the to be superior court did not abuse its discretion in reinstating the case. FACTS AND PROCEDURAL BACKGROUND ¶2 On July 9, 2009, Community Bank sued ABCDW, seeking a deficiency judgment against it after a real property trustee s sale. On August 14, 2009, Nevada regulators closed Community Bank and appointed Federal Deposit Insurance Company ( FDIC ) as the receiver. After Community Bank s counsel withdrew from the case, FDIC noticed its appearance on October 19, 2009. answer, filed on November 23, 2009, ABCDW admitted In its it had defaulted but contested its liability to Community Bank. 1 Other co-Defendants/Appellants include Vanderbilt Farms, LLC, Brandon D. Wolfswinkel, and Ashton A. Wolfswinkel. 2 ¶3 Pursuant to Arizona Rule of Civil Procedure ( Rule ) 38.1, on April 22, 2010, court administration issued an order placing the case on the inactive calendar for dismissal on June 21, 2010, unless one of the actions designated under Rule 38.1 occurred ( 38.1 Order ). The 38.1 Order only listed ABCDW s counsel and not FDIC s counsel. designated steps by June FDIC failed to take any of the 21, and, on July 15, court administration dismissed the case without prejudice for lack of prosecution. On July 22, FDIC moved to reinstate the case under Rule 60(c). ¶4 ABCDW did not respond to the reinstatement motion. Instead, on August 9, one day before its response to FDIC s motion to reinstate was due, ABCDW moved to enlarge time to respond to the motion, arguing it needed additional time to seek an expert opinion on whether FDIC s failure to file a motion to set was the result of excusable neglect. ¶5 After considering the reinstatement motion, ABCDW s motion to enlarge time, and FDIC s response to ABCDW s motion, the superior court found it clear from the record that FDIC had not received the 38.1 Order and ruled the lack of notice constitute[d] excusable neglect. case on dismissal. the active calendar The court thus reinstated the and vacated the judgment It also denied ABCDW s motion to enlarge time. 3 of ¶6 We Statutes have ( A.R.S. ) jurisdiction sections pursuant to Arizona 12-120.21(A)(1)(2010) Revised and 12- 2101(C)(2010). 2 DISCUSSION I. Rule 60(c) Relief from Judgment A. Excusable Neglect ¶7 ABCDW argues the superior court abused its discretion in reinstating the case because, even assuming FDIC did not receive the 38.1 Order, FDIC failed to exercise diligence to stay informed of the case status. As explained below, see infra ¶¶ 8-9, an attorney s obligation to keep advised of the status of his or her case is not the dispositive factor for excusable neglect; it is only one factor. Based on the record presented, the court did not abuse its discretion in reinstating the case given the totality of the circumstances. at 488, ¶ 9, 967 P.2d at 1024 See Johnson, 192 Ariz. (appellate court reviews a superior court s decision to grant a Rule 60(c) motion for an abuse of discretion. ); Toy v. Katz, 192 Ariz. 73, 83, 961 P.2d 2 [A]n order vacating an order of dismissal is appealable . . . . Edgar v. Garrett, 10 Ariz. App. 98, 98-99, 456 P.2d 944, 944-45 (1969); see Johnson v. Elson, 192 Ariz. 486, 488, ¶ 6, 967 P.2d 1022, 1024 (App. 1998) ( The dismissal order was a final order. Therefore, the judgment setting aside that dismissal was a special order made after final judgment. (quoting A.R.S. § 12-2101(C))). 4 1021, 1031 (App. 1997) (abuse of discretion occurs when a superior court s ruling has exceeded the bounds of reason. ) ¶8 To generally obtain must relief (1) show under Rule mistake, 60(c)(1), inadvertence, a plaintiff surprise or excusable neglect; (2) seek relief promptly; and (3) demonstrate the existence of a meritorious claim. Copeland v. Ariz. Veterans Mem l Coliseum and Exposition Ctr., 176 Ariz. 86, 89, 859 P.2d 196, 199 (App. 1993). Neglect is excusable if it might be the act of a reasonably prudent person under the same circumstances. 346, 348, Phoenix 942 v. (1985)). Jarostchuk v. Aricol Commc ns, Inc., 189 Ariz. P.2d Geyler, 1178, 144 1180 Ariz. (App. 323, 1997) 331, 697 (quoting P.2d City 1073, of 1081 In reviewing Rule 60(c)(1) cases, our supreme court recognized that diligence is the mistake or neglect is excusable. final arbiter of whether Geyler, 144 Ariz. at 332, 697 P.2d at 1082. ¶9 A court should consider the totality of the circumstances . . . in determining whether a party diligently prosecuted the case, Copeland, 176 Ariz. at 90, 859 P.2d at 200 (citing Jepson v. New, 164 Ariz. 265, 276, 792 P.2d 728, 739 (1990)), including such non-dispositive factors as the court s obligation to give notice of impending dismissal, id.; see Ariz. R. Civ. P. 38.1(e); Am. Asphalt & Grading Co. v. CMX, 5 L.L.C., 227 Ariz. 117, 118, ¶ 8, 253 P.3d 1240, 1241 (2011), and an attorney s obligation to remain advised of status of any action in which he has appeared. the ongoing Copeland, 176 Ariz. at 90, 859 P.2d at 200; see Ariz. R. Civ. P. 5.1(b). By considering each as a factor in the Rule 60(c) analysis, we can reconcile two policy concerns: we avoid dismissal of cases in active litigation due to minor procedural errors, while holding the parties involved, rather than the court system, responsible for diligent prosecution of litigation. Copeland, 176 Ariz. at 90, 859 P.2d at 200 (citations omitted). ¶10 Here, FDIC s counsel noticed its appearance, requested future court notices, and received one minute entry after he appeared in the case. The record however, receive the 38.1 Order. filings in points its out, notice FDIC made of FDIC did not, Although FDIC requested future appearance, no reflects showing we it independently calendar case deadlines. recognize, had taken as ABCDW steps to We also acknowledge a prudent attorney remains informed about the status of his or her cases, including calendaring deadlines, but this obligation is only one factor in the analysis. For example, FDIC was actively prosecuting the case by submitting discovery requests to ABCDW. Given the court s failure to send the 38.1 Order to FDIC and FDIC s active prosecution of the 6 case, we cannot say the superior court abused its discretion in concluding FDIC s neglect was excusable. B. Meritorious Claim ¶11 ABCDW discretion in also argues reinstating the the superior case demonstrate a meritorious claim. court because FDIC abused failed its to ABCDW failed to raise this argument in the superior court, and thus this argument is not properly before us. Harris v. Cochise Health Sys., 215 Ariz. 344, 349, ¶ 17, 160 P.3d 223, 228 (App. 2007) (appellate court will not consider issues not raised in the superior court). Nevertheless, based on its pleadings and discovery requests, it is apparent FDIC was challenging ABCDW s factual assertions regarding the fair market value of the property. II. Motion to Enlarge Time ¶12 ABCDW also argues the superior court abused its discretion in refusing to extend ABCDW s time to respond to the reinstatement motion, because it did not consider whether ABCDW had established good cause to extend time or whether FDIC would be prejudiced by the extension. ABCDW also argues the court should not have denied its request for an extension of time without considering its reply in support of its request. disagree with each argument and see no abuse of discretion. 7 We ¶13 ABCDW argued it needed additional time to respond to FDIC s motion so that it could consult with an expert to determine whether FDIC s actions constituted excusable neglect. On this record, ABCDW did not need to consult with an expert to respond to the motion to reinstate or to discuss whether FDIC s actions constituted excusable neglect. See Webb v. Omni Block, Inc., 216 Ariz. 349, 354-55, ¶¶ 17-20, 166 P.3d 140, 145-46 (App. 2007) Moreover, deadline (expert ABCDW to may waited request an not testify until one extension to legal conclusion). day before the response and, besides asserting it needed an expert, only cited its attorney s scheduled vacation -- which began after the response s deadline -- to justify its need for additional time to respond. Because ABCDW failed to show good cause for an extension, the superior court did not need to consider whether FDIC would have been prejudiced by the proposed extension. ¶14 Additionally, ABCDW s reply in support of its motion to enlarge time did not differ in substance from its original motion. It merely cited a case discussing the court s discretion in reinstating a case and reiterated counsel s duty to exercise[] developments failed to in reasonable its consider case. ABCDW s diligence in Accordingly, reply, 8 ABCDW keeping abreast assuming did not the of court present any argument or evidence in the reply that would require reversal of the court s ruling. the superior court Therefore, on this record, we cannot say abused its discretion in denying ABCDW s motion to enlarge time. CONCLUSION ¶15 For the foregoing reasons, we affirm the superior court s judgment vacating the dismissal and reinstating the case on the active calendar. ¶16 Both parties § 12-341.01 (2003). request attorneys fees under A.R.S. Because neither side has prevailed in this case yet, we deny the parties requests without prejudice to the superior court considering their competing fee requests upon the conclusion of the sanctions under ( ARCAP ) 25. case. We Arizona Rule Nevertheless, also of deny Civil because FDIC s request Appellate FDIC has for Procedure prevailed on appeal, we award its costs on appeal subject to its compliance with ARCAP 21. /s/ PATRICIA K. NORRIS, Judge CONCURRING: /s/ DIANE M. JOHNSEN, Presiding Judge /s/ PATRICIA A. OROZCO, Judge 9

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