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Phoenix Metals Corp. v. Roth

Supreme Court of Arizona

May 31, 1955

PHOENIX METALS CORPORATION, a corporation, Appellant,
William ROTH and Ellen E. Roth, husband and wife, Appellees.

Shimmel, Hill & Hill, Phoenix, for appellant.

Clarence O. Fehling, Phoenix, for appellees.

UDALL, Justice.

This is an appeal from an order denying defendant's motion to vacate and set aside a clerk's default and a later default judgment entered in said action.

[79 Ariz. 107] The action was commenced on December 4, 1952, by William Roth et ux. (plaintiffs-appellees) to recover $2,711.12 on a contract of employment with defendant-appellant, Phoenix Metals Corporation, a corporation. (The parties will hereafter be referred to as plaintiff and defendant.) The defendant was served with process on December 5, 1952 and it timely filed an answer and paid the filing fee to the clerk of court on December 24, 1952. However the clerk, purporting to act under Rule 55(a), Rules Civ.Proc., Section 21-1205, A.C.A.1939, upon application of counsel for plaintiff, improperly entered defendant's default on December 27, 1952. Thereafter, on January 5, 1953, the court entered judgment against the defendant for the full amount claimed and therein foreclosed a writ of garnishment against the Garrett Corporation in the sum of $1,656.12. Defendant was aware this writ had issued but upon advice of counsel no bond was posted, defendant deciding to leave the sequestered funds to abide the outcome of the action. Neither the defendant corporation nor its counsel was informed the writ had been foreclosed and the moneys paid to plaintiff. Nor did the defendant or its counsel have notice of the entry of said default, or the rendition of said judgment, until thirteen months later

Page 646

when on February 4, 1954, counsel learned of it after giving notice of intention to take the plaintiff's deposition. Upon being advised that a judgment had been entered defendant immediately moved to vacate and set aside clerk's default and the default judgment as being void. This was supported by an affidavit and memorandum of authorities. After this motion was denied, a motion for rehearing and reconsideration was filed-briefed and orally argued-and it was denied on March 24, 1954. This appeal followed.

In support of defendant's contention that the trial court erred in denying its motion to vacate and set aside, it is urged that the clerk's default and the court's judgment based thereon-which recites that 'the defendant having failed to appear or answer plaintiffs' complaint within the time allowed by law * * *'-are both absolutely void and therefore subject to attack extrinsic-constructive fraud. Defendant extrinsic-constructive fraud. Defendant further maintains that the court was without legal authority or power to render a default judgment against it without notice and an opportunity to be heard, where defendant had in fact answered within the time prescribed by law. This, it asserts, is a deprivation of due process of law, guaranteed both by the 14th Amendment to the Constitution of the United States and its counterpart, Article 2, Section 4, Constitution of Arizona.

Plaintiff on the other hand contends the judgment entered is only voidable and irregular and hence can only be assailed within the six-month period provided by Rule (60)b, Rules Civ.Proc., Section 21-1502, A.C.A.1939-(this being the time in [79 Ariz. 108] which a judgment may be vacated on account of defendant's surprise, mistake, excusable neglect, etc.) It is his position that defendant's attack not having been made within this period the judgment had become res judicata, and the court was without jurisdiction to vacate it. It is apparent that it was upon this latter theory that the trial court refused to vacate the judgment. Plaintiff further maintains that the existence of an answer on file did not render the judgment void but only voidable, and that entering said judgment was a mere 'serious procedural irregularity' curable only on direct attack within the six-month period. In support of this theory counsel cite and strongly rely upon the following respectable authorities, viz.: Gray v. Hall, 203 Cal. 306, 265 P. 246; United States Bldg. & Loan Ass'n v. Soule, 57 Idaho 691, 68 P.2d 40.

It now appears the genesis of this 'comedy of errors' was a mistake in the clerk's office in inadvertently attaching the answer to another court file, which error was not discovered until February, 1954. Counsel for plaintiff in his brief justifies his action in asking for default in that an examination of the court file did not disclose an answer and that he was never served with a copy of defendant's answer as is required by Rule 5(b), Rules Civ.Proc., Section 21-322, A.C.A.1939. His affidavit for default states, inter alia:

'* * * That the defendant has made no answer, or appearance by person, by attorney or otherwise, but has wholly defaulted therein.'

The answer filed does not have upon its face-or on a sheet attached thereto-the customary statement that copy had been mailed to opposing counsel. However, the motion to vacate recites that a copy of the answer was mailed to plaintiff's counsel which is supported by an affidavit of Connie D. Vernon, secretary to defendant's attorney, that on the same day the answer was filed.

'* * * she placed a copy of said answer in an envelope, addressed to plaintiff's counsel, 411 Arizona Title Building, Phoenix, Arizona, which envelope was sealed and on which the postage was prepaid, and mailed the same in the United States mails in the city of Phoenix, Maricopa County, Arizona.'

Also attached to the motion for rehearing is an affidavit by defense attorney that he '* * * caused a copy of such answer to be served upon plaintiffs' counsel' in the manner set forth in his secretary's affidavit.

Page 647

Apparently the trial court did not consider-nor do we- that the written record raised a conflict on the issue of service of the answer, at least there is no express finding thereon. Rule 5(b) states '* * * Service by mail is complete upon mailing', hence it is not dependent upon the receipt of same by opposing counsel. See ...

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