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LREP Arizona LLC v. 597 Broadway Realty LP

United States District Court, D. Arizona

April 10, 2018

LREP Arizona LLC, Plaintiff,
v.
597 Broadway Realty LP, et al., Defendants.

          ORDER

         Before the Court is Defendants' Rule 60 Motion to Vacate Judgment, which is fully briefed. (Docs. 36, 44, 46.) For the following reasons, Defendants' motion is granted.[1]

         I. Background

         On November 18, 2016, Plaintiff filed a complaint against Defendants alleging a single count for breach of contract. (Doc. 1.) That same day, Plaintiff filed what was styled as a Stipulated Motion for Entry of Judgment, which indicated that the parties agreed and consented to the terms of the proposed judgment and that Defendants agreed to the allegations set forth in the complaint. (Doc. 3.) The matter initially was referred to Magistrate Judge Deborah M. Fine for a report and recommendation (“R&R”). On December 15, 2016, Magistrate Judge Fine issued an R&R recommending for a number of reasons that the Court deny the stipulated motion without prejudice. (Doc. 6.)

         On December 28, 2016, Plaintiff filed written objections to the R&R. (Doc. 9.) Several months later, Plaintiff filed a motion asking the Court to continue the case on the inactive calendar because the parties were discussing settlement. (Doc. 11.) The Court granted the request and ordered that the case would be dismissed on June 15, 2017 unless, before then, the parties filed a stipulation to dismiss or moved for a status conference. (Doc. 12.)

         On May 24, 2017, Plaintiff moved to reinstate the case on the active calendar because the parties had not reached a settlement. (Doc. 13.) The Court held a telephonic conference to discuss the motion on June 21, 2017. (Doc. 15.) Only counsel for Plaintiff appeared. Counsel for Plaintiff confirmed that Defendants had not yet been served. At the conclusion of the conference, the Court granted the motion and ordered that Plaintiff serve Defendants within 60 days.

         On July 25, 2017, before the expiration of that service deadline, the Court issued an order sustaining Plaintiff's objections to Magistrate Judge Fine's R&R and granting the parties' Stipulated Motion for Entry of Judgment in a modified form. (Doc. 17.) The Clerk entered judgment the same day, and thereafter Plaintiff filed several applications for writs of garnishment to collect on the stipulated judgment. (Docs. 18, 19, 21, 23, 25, 34.) On September 8, 2017, Defendants moved to vacate the judgment pursuant to Federal Rule of Civil Procedure 60, arguing that they had not been served with the summons, complaint, or any order of the Court, and that they first learned of this action when a garnishee answered a writ and froze one of Defendant's retirement investment savings accounts. (Doc. 36.)

         II. Legal Standard

         Rule 60(b) provides for relief from judgment under the following circumstances:

(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or misconduct by an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it ...

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