Aea v. T&K ( 2015 )

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT
PRECEDENTIAL AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.
IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE
AEA FEDERAL CREDIT UNION, a federal credit union, Plaintiff/Appellee,
v.
T&K ENTERPRISES AUTO SALES & LEASING, LLLP,
Defendant/Appellant.
No. 1 CA-CV 14-0511
FILED 12-1-2015
Appeal from the Superior Court in Yuma County
No. S1400CV200901724
The Honorable John P. Plante, Judge
AFFIRMED
COUNSEL
Garcia, Kinsey & Villarreal, PLC, Yuma
By John S. Garcia, Meghan C. Scott, Brandon S. Kinsey
Counsel for Appellee
Schneider & Onofry PC, Yuma
By Jason M. Kelly
Counsel for Appellant
AEA v. T&K
Decision of the Court
MEMORANDUM DECISION
Judge Kent E. Cattani delivered the decision of the Court, in which
Presiding Judge Diane M. Johnsen and Judge John C. Gemmill joined.
C A T T A N I, Judge:
¶1 T&K Enterprises Auto Sales & Leasing, LLLP (“LLLP”)
appeals the superior court’s order denying its motion to set aside two
replevin orders. For reasons that follow, we affirm.
FACTS AND PROCEDURAL BACKGROUND
¶2 AEA Federal Credit Union (“AEA”) loaned money to
Kenneth Stevenson and Maria Stevenson d/b/a T&K Enterprises (“T&K”),
a “sole proprietorship,” to finance the Stevensons’ car dealership. The
Stevensons granted AEA a security interest in their “eligible passenger
vehicles,” a deposit account, and personal property, including equipment
and inventory.
¶3 In 2009, AEA filed a complaint against the Stevensons—
individually and d/b/a T&K—alleging breach of contract and various
other civil claims and sought the provisional remedy of replevin without
notice. AEA simultaneously filed an application for replevin without notice
for vehicles and personal property, which the superior court granted.
¶4 AEA served Maria Stevenson personally, and Yuma County
Sheriff’s officers seized most of the vehicles identified in the order for
replevin. Upon AEA’s supplemental application, the superior court issued
an additional supplemental replevin order without notice for vehicles and
personal property not previously replevied under the prior order. AEA
then personally served Kenneth Stevenson and T&K.1
1 Although LLLP claims T&K was never served, the record shows a
process server served copies of the summons (directed to “T&K
Enterprises”), complaint, initial replevin order and requisite statutory
notices on T&K by delivering them to Kenneth Stevenson. LLLP states that
T&K was a partnership and Kenneth and Maria Stevenson were its
partners. Under Arizona law, a domestic partnership can be served by
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AEA v. T&K
Decision of the Court
¶5 Neither the Stevensons nor T&K moved to quash the replevin
orders or otherwise contested the seizure of the vehicles. Kenneth
Stevenson responded to the complaint, but he did not appear at a one-day
bench trial in 2013, and the court entered a deficiency judgment against
him. Maria Stevenson did not respond to the complaint, and the superior
court entered a default judgment against her.
¶6 Almost five months after entry of the default and deficiency
judgments, LLLP entered a special appearance and moved, under Rule
60(c) of the Arizona Rules of Civil Procedure, to set aside the two replevin
orders entered four years earlier. Specifically, LLLP claimed T&K was
actually a partnership (not a sole proprietorship) and Kenneth and Maria
Stevenson were its partners, T&K (not the Stevensons) owned the vehicles
replevied four years earlier, and AEA never had a security interest in the
vehicles. LLLP urged that the replevin orders were void for lack of
jurisdiction and should be set aside based on AEA’s alleged fraud on the
court. See Ariz. R. Civ. P. 60(c)(4) (authorizing relief from judgment if “the
judgment is void”), (6) (catch-all provision to set aside judgment for “any
other reason justifying relief”). AEA countered that LLLP, the alleged
successor entity to T&K formed months after entry of the final judgment,
had no standing to challenge the replevin orders and that LLLP’s failure to
challenge the final judgment precluded its attack on the prior interlocutory
order.
¶7 The superior court found that although the Stevensons signed
loan documents giving security interests using the name Kenneth and
Maria Stevenson d/b/a T&K (a sole proprietorship), they had actually
formed a partnership called T&K. The court further noted that even though
the replevied vehicles appeared to be titled in the name of T&K, neither of
the Stevensons—despite ample opportunity—raised the argument that the
replevin was improper on the basis that T&K was a partnership. Without
ruling whether LLLP had standing to bring the motion to set aside, the
court found that the Stevensons or the partnership were “required to object
[to the replevin] before the vehicles were sold and the funds were credited,
but at least prior to final judgment.”
¶8 The superior court ultimately denied LLLP’s Rule 60 motion
to set aside the replevin orders, finding that it was not timely filed. See Ariz.
R. Civ. P. 60(c) (requiring that a motion for relief from judgment be filed
“within a reasonable time”). The court further noted that although Rule 60
delivering a copy of the summons and the pleading to a partner. See Ariz.
R. Civ. P. 4.1(i).
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AEA v. T&K
Decision of the Court
allows relief from a final judgment, LLLP’s motion sought relief only from
the interlocutory replevin orders, not the final judgment itself.
¶9 LLLP timely appealed the denial of its Rule 60 motion, and
we have jurisdiction under Arizona Revised Statutes (“A.R.S.”) § 12-
2101(A)(2).2 See M & M Auto Storage Pool, Inc. v. Chem. Waste Mgmt., Inc.,
164 Ariz. 139, 140–41, 791 P.2d 665, 666–67 (App. 1990) (addressing
appealability of order setting aside prior order of dismissal).
DISCUSSION
I. Motion to Set Aside.
¶10 LLLP contends the superior court erred by failing to set aside
the replevin orders under Rules 60(c)(4) and (6).3 LLLP argues the replevin
orders were void because they were obtained in violation of T&K’s due
process rights, the superior court lacked personal jurisdiction over T&K,
and the complaint failed to state a claim against T&K.
¶11 We review de novo the denial of a Rule 60(c)(4) motion to set
aside a void judgment. Ezell v. Quon, 224 Ariz. 532, 536, ¶ 15, 233 P.3d 645,
649 (App. 2010). We review the denial of a Rule 60(c)(6) motion for abuse
of discretion. Id.
¶12 Rule 60(c) provides for relief only from a final judgment, order
or proceeding; it cannot be used to set aside an interlocutory order from
which no appeal independently lies. Altman v. Anderson, 151 Ariz. 209, 211–
12, 726 P.2d 625, 627–28 (App. 1986). A judgment, order, or proceeding, as
contemplated by Rule 60(c), is not final until either all claims are resolved
or the court expressly directs entry of final judgment on fewer than all of
the claims as authorized by Arizona Rule of Civil Procedure 54(b). Id. An
order that does not dispose of all claims and that lacks a Rule 54(b)
2 Absent material revisions after the relevant date, we cite a statute’s
current version.
3 It is not clear that LLLP has standing to appeal. Neither LLLP nor
its alleged predecessor entity T&K was a party to the lawsuit below,
although the complaint named the Stevensons individually and “doing
business as T&K Enterprises.” AEA does not explicitly challenge LLLP’s
status on appeal as an aggrieved party, and we thus consider the merits of
this appeal without deciding the issue of standing. See State v. B Bar Enters.,
Inc., 133 Ariz. 99, 101 n.2, 649 P.2d 978, 980 n.2 (1982).
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AEA v. T&K
Decision of the Court
certification is subject to revision at any time before entry of final judgment
adjudicating all the claims.
¶13 The replevin orders in this case did not contain Rule 54(b)
language and were not otherwise final. See Milner v. Colonial Tr. Co., 198
Ariz. 24, 26, ¶ 6, 6 P.3d 329, 331 (App. 2000) (noting that the court of appeals
dismissed earlier appeal for lack of jurisdiction because “order denying the
writ of replevin was interlocutory in nature and not a final, appealable
order”); see also Schoolhouse Educ. Aids, Inc. v. Haag, 145 Ariz. 87, 89, 699 P.2d
1318, 1320 (App. 1985) (“The wording of the replevin statutes clearly states
that they are preliminary in nature . . . .”). Moreover, entry of the final
judgment did not bring the prior interlocutory replevin orders within the
scope of Rule 60(c). Although entry of judgment makes a prior, partial
judgment that lacked Rule 54(b) language final, see Hill v. City of Phoenix,
193 Ariz. 570, 573–74, ¶¶ 15–16, 975 P.2d 700, 703–04 (1999), Rule 60(c) relief
is confined to review of orders that are “independently” final. See Kapco
Mfg. Co. v. C & O Enters., Inc., 773 F.2d 151, 154 (7th Cir. 1985) (interpreting
similarly-worded Federal Rule 60(b)). Independent finality is required
because “[o]therwise the Rule creates a power of modification redundant
with the ordinary power to conduct pending proceedings and rethink
earlier orders.” Id.
¶14 Here, LLLP did not move to set aside the final judgment.
Accordingly, the superior court correctly concluded that it could not set
aside the replevin orders.4
¶15 A comparison of Rule 60(c) with Rule 54(a) supports this
analysis. Rule 60(c) (including both subsections (4) and (6)) permits relief
from a “final judgment, order or proceeding” for defects with the
“judgment.” Rule 54(a) provides that “’[j]udgment’ as used in these Rules
includes a decree and an order from which an appeal lies.” Ariz. R. Civ. P. 54(a)
(emphasis added). Under A.R.S. § 12-2101 (the main statute governing
appeals in civil actions), appeals are permitted from a final judgment, any
special order made after final judgment, an order granting or refusing a
new trial, and an order dissolving or refusing to dissolve an attachment or
garnishment, among other things. Notably, the legislature has not made
4 We note that had T&K (the entity in existence at the relevant time)
timely appealed from the final judgment, it could have obtained review of
the interlocutory replevin orders. See Pepsi-Cola Metro. Bottling Co. v.
Romley, 118 Ariz. 565, 568, 578 P.2d 994, 997 (App. 1978) (timely appeal from
final judgment “properly placed before us the propriety of all prior non-
appealable orders”); see also A.R.S. § 12-2102(A).
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AEA v. T&K
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orders dissolving or refusing to dissolve replevin directly appealable. See
A.R.S. § 12-2101; see also Milner, 198 Ariz. at 26, 6 P.3d at 331; State v. Bayardi,
230 Ariz. 195, 197, ¶ 6, 281 P.3d 1063, 1065 (App. 2012) (noting that the right
to appeal in Arizona is “purely statutory”).
¶16 Because replevin orders are not appealable, they are not
“judgments” pursuant to Rule 54(a). See Blackman v. Assocs. Loan Co., 1 Ariz.
App. 11, 12, 398 P.2d 919, 920 (1965) (order denying motion to quash
garnishment is a judgment under Rule 54(a) because appeals can be taken
from an order refusing to dissolve an attachment or garnishment).
Accordingly, LLLP was not entitled to set aside the replevin orders based
on Rule 60(c)(4) or 60(c)(6), and we therefore affirm the superior court’s
denial of relief.5
II. Request for Attorney’s Fees and Costs.
¶17 Both LLLP and AEA request an award of attorney’s fees
under A.R.S. § 12-341.01(A), which authorizes a discretionary award of
attorney’s fees to the successful party in a case arising out of contract. They
also seek costs under A.R.S. § 12-342. As the prevailing party, AEA is
entitled to its costs on appeal and, in an exercise of our discretion, we award
AEA its reasonable attorney’s fees, both awards upon compliance with
ARCAP 21.
CONCLUSION
¶18 For the foregoing reasons, we affirm the superior court’s
decision and award AEA its attorney’s fees and costs on appeal.
:ama
5 Our ruling on this issue renders moot LLLP’s other arguments.
6