Division One
APPELLANTS’ OPENING BRIEF
CONTENTS
City of Phoenix v. Geyler, 144 ARIZ. 323, 697 P.2D 1073 (1985) passim
Park v. Strick, 137 ARIZ. 100, 669 P.2D 78 (1983) passim
Rodgers v. Watt 722 F.2D 456, 460 (9th Cir. 1983) 9, 10
Varga v. Hebern, 116 ARIZ. 539, 570 P.2D 226 (1977) 6, 7, 12
Vital v. Johnson, 128 ARIZ. 129, 624 P.2D 326 (App. 1980) 8, 9
A.R.S. § 12-120.21 (A) 6
A.R.S. § 12-123 6
A.R.S. § 12-133 3, 8, 12, 14
A.R.S. § 12-2101 (C) 6
A.R.S. § 12-2101.01 (A) (4) and (5) 6
A.R.S. § 12-341.01 (A) 14
A.R.Civ.P. 6 (b) 4, 5, 7
A.R.Civ.P. 6 (b) (2) 5
A.R.CIV.P. 55 (c) 13
A.R.Civ.P. 60 1, 5, 11
A.R.Civ.P. 60 (c) (6) 8
U.R.PROC.ARB. 5 (c) 6
U.R.PROC.ARB. 7 1, 4
U.R.PROC.ARB. 7 (a) 6
U.R.PROC.ARB. 7 (f) 14
Maricopa County Superior Court Local Rule 3.10 3
Plaintiff brought action for alleged fraud and breach of contract, and case was referred for compulsory arbitration. Court-appointed arbitrator entered an award in favor of Defendants Roe. More than twenty days after entry of award, Plaintiff filed Notice of Appeal and Motion to Set, seeking de novo appeal under U.R.PROC.ARB. 7. After Defendants Roe challenged appeal for timeliness, Plaintiff sought Rule 60 relief from judgment for purposes of “delayed appeal.” Defendants Roe appeal from order granting Rule 60 relief and ordering trial de novo.
Plaintiff Jarostchuk brought this action against Aricol Communications, Inc., and others, including Defendants-Appellants Roe, on December 11, 1992. As ultimately amended, Plaintiff’s complaint sought damages for alleged breach of contract, fraud and fraud-based “mini-RICO” violations. Plaintiff asserted that the amount in controversy was less than the limit provided by local rule, and procured reference of the case to a court appointed arbitrator pursuant to A.R.S. § 12-133 and Maricopa County Superior Court Local Rule 3.10.
After the arbitration hearing, the court-appointed arbitrator informed the parties of his intention to rule in favor of Defendants Roe and to entertain their application for attorney’s fees. After the attorney’s fee issue had been briefed, Plaintiff objected to the form of award proposed by Defendants Roe and requested additional time to brief one of the disputed aspects of the form of award (to wit, its treatment of Plaintiff’s claims against Defendant Aricol Communications, Inc.) The arbitrator granted this request and fixed a date for Plaintiff’s submission of a memorandum. Plaintiff, however, never filed the memorandum which he had asked for permission to file. Several days after the time fixed for the submission of Plaintiff’s additional memorandum regarding the form of award had passed, the arbitrator proceeded to enter his award.
On September 22, 1995, the arbitrator signed a formal written award bearing that date, and filed it with the Clerk of Court. An endorsement at the foot of the award specifically indicated that it was being transmitted to the Court the same day. Index 103. On the afternoon of that same day, the arbitrator’s office: (1.) faxed full copies of the signed award to counsel for Plaintiff and counsel for Defendant’s Roe; and (2.) mailed
photocopies of the signed award to said counsel. The award disposed of all remaining claims and parties in the action.1
There has never been any dispute that Plaintiff’s counsel actually received these (faxed and xeroxed) copies in timely fashion, and that as a result Plaintiff’s counsel had actual and accurate knowledge of the September 22, 1996 entry of the arbitration award.
The time for filing of a “Notice of Appeal and Motion to Set,” as prescribed by U.R.PROC.ARB. 7 (a), expired with October 12, 1995. On October 16, 1995, the attorney for Defendants Roe contacted Plaintiff’s attorney regarding satisfaction of the attorney’s fee award which had been made in Defendants’ favor. Plaintiff’s attorney stated that Plaintiff intended to appeal from the award. The attorney for Defendants Roe pointed out that the time for commencement of a de novo appeal from the arbitrator’s award had expired. Plaintiff’s attorney stated that a notice of appeal would be filed anyway. Plaintiff’s Notice of Appeal and Motion to Set was filed later that afternoon (October 16, 1995).
Defendants Roe moved to strike the Notice of Appeal and Motion to Set, noting its untimeliness. Index 107. In response, Plaintiff conceded his failure to meet the U.R.PROC.ARB. 7 (a) deadline but asked for extension of that deadline pursuant to A.R.CIV.P. 6 (b)2 and/or relief from the award for purposes of “delayed appeal,” under Park v. Strick, 137 ARIZ. 100, 104, 669 P.2D 78 (1983) and City of Phoenix v. Geyler,
144 ARIZ. 323, 328, 697 P.2D 1073 (1985). Plaintiff’s “Response To Motion To Strike, Or, Alternatively, Motion For Relief From Judgment Pursuant To Rule 60 (c),” Index
The arbitrator ruled in favor of Defendants Roe and awarded them part of the attorney’s fees and costs they claimed. The award also reflected the arbitrator’s determination that Plaintiff had abandoned his claims against Aricol Communications, Inc. Defendants Freese had been dismissed out after the trial court was notified they had filed a petition under Chapter 7 of the Bankruptcy Code. Defendants Hughes were dismissed out pursuant to a settlement agreement.
The trial court clearly lacked authority to use Rule 6 (b) to extend the period for appeal from the arbitration award. Varga v. Hebern, 116 ARIZ. 539, 541, 570 P.2D 226 (App. Div. 1 1977).
109, was filed on November 13, 1996 — 32 days after the appeal deadline had expired and 30 days after defense counsel had drawn the attention of Plaintiff’s attorney to the expiration of that deadline.
As the basis for this request, Plaintiff’s counsel avowed that he had relied entirely upon his secretary’s calendaring of the appeals deadline, and submitted his secretary’s affidavit. The secretary stated that she had limited legal experience, and her affidavit made it clear (by implication) that she knew that the award was entered on September 22 and that the appeal period was 20 days. According to the secretary’s affidavit, in counting the 20 days she excluded Saturday, September 23, believing it was “the first day of the period” but was not to be included in calculating the period, and also excluded Sunday, September 24, but included Saturday, September 30, Sunday, October 1, Saturday, October 7, Sunday, October 8, Columbus Day, October 9, Saturday, October 14 and Sunday, October 15. In this fashion, the secretary had calculated October 16, and not October 12, as the 20th day after September 22 and had accordingly entered October 16 on the office calendar as the last day for filing of the notice of appeal.
Defendants had no basis to contend the account given by Plaintiff’s attorney was not veridical,3 but argued that even taken at face value it was legally insufficient to justify the relief Plaintiff requested. Index 110. The trial court granted Plaintiff relief under Rule 60 (and, purportedly, under Rule 6 (b) (2) as well) and ordered the matter set for trial de novo.
Defendants have, however, wondered how any moderately literate person, with or without legal experience, could arrive at October 16 as the 20th day after September 22. The “day of the act, event or occurrence” (the entry of judgment) was, of course, September 22. How anyone could think the “first day of the period” should be excluded in computing the period is something of a mystery. Consistently applied, of course, such a rule of computation would mean that no period would ever end, because no period would ever begin. How the “first day of the period” could be confused with the “last day of the period” is also somewhat mysterious. Defendants have also noted the remarkable coincidence that the mysteriously calculated date (October 16) just happened to be the same day defense counsel contacted Plaintiff’s attorney regarding satisfaction of the attorney’s fee award, was told Plaintiff intended to appeal, and in reply pointed out that October 12 had been the last day for appeal.
In making this ruling, the trial judge expressly stated his conclusion
that the “compelling circumstances” relied on by Defendant [i.e., “extraordinary, unique or compelling circumstances” within the meaning of Park v. Strick and City of Phoenix v. Geyler] do not apply in this setting [i.e., delayed appeal from an arbitration award, as opposed to a court judgment], and that Plaintiff has made the requisite showing of excusable neglect. Minute order of December 20, 1995, Index 112.
(c) upon the would-be appellant’s failure to file a notice of appeal and deposit a bond for costs within the time limits prescribed by U.R.PROC.ARB. 7 (a), it lost jurisdiction to
Under Park v. Strick, 137 ARIZ. 100, 669 P.2D 78 (1983) and City of Phoenix v. Geyler, 144 ARIZ. 323, 697 P.2D 1073 (1985), the standard of review of an order granting Rule 60 relief from judgment for purposes of delayed appeal is abuse of discretion. See discussion of “abuse of discretion” standard in Geyler, 144 ARIZ. at 329. In this case, however, Defendants-Appellants contend that insufficiency-of-notice is a legal prerequisite to “delayed appeal” relief, and that in addition “extraordinary, unique or compelling circumstances” must be found. There is no dispute that Plaintiff’s attorney received actual, accurate and timely notice of the entry of the award, and it is clear that the trial court did not find “extraordinary, unique or compelling circumstances,” believing that it was only necessary to find “excusable neglect.” Since these are pure questions of law, the standard of review as to the issues raised by Appellants in this case is essentially one of review de novo.
entertain a de novo appeal from the award, at least as long as the award remains “effective as a judgment of the Superior Court.”
Second, the basic approach of the Varga court to the compulsory arbitration award and the questions raised regarding the viability of attempted appeal from such an award was one of equating the compulsory arbitration award to a court judgment. In Varga, as in this case, the trial court had assumed that its power under Rule 6 (b) (to enlarge time periods “prescribed in these rules [i.e., the Rules of Civil Procedure]”) extended to the appeal period prescribed in the Arbitration Rules; the appellate court, however, analogized the appeal provisions of the statutes and rules governing compulsory arbitration to the provisions for appeal to the Court of Appeals from Superior Court judgments. By its holdings, its reasoning — especially, by casting its limitations on trial court authority in jurisdictional terms — by its references to precedent and its express statement that it is correct to analogize the compulsory arbitration award to a final superior court judgment, Varga clearly, if implicitly, teaches that the procedural propriety of a post-award challenge to a compulsory arbitration award should be determined in the same manner as is the procedural propriety of a post-judgment challenge to any court judgment.
Besides being supported by Varga, this procedural principle has the advantages of promoting simplicity and uniformity in civil procedure and of promoting the purpose of the legislative reforms which gave rise to compulsory arbitration programs in the Superior Court. If this basic procedural premise is accepted, then the authorities which govern Rule 60 “delayed appeal” relief from Superior Court judgments, namely Park v. Strick, 137 ARIZ. 100, 669 P.2D 78 (1983) and City of Phoenix v. Geyler, 144 ARIZ. 323, 697 P.2D 1073 (1985), are also controlling here. If it is not accepted, then it will be up to
this Court to enunciate standards which will govern “delayed appeals” from compulsory arbitration awards.5
The teachings of Park v. Strick and City of Phoenix v. Geyler are clear. To justify Rule 60 “delayed appeal” relief, the movant must establish both: (1.) lack of or defect in the notice of entry of judgment received by him; and (2.) additional “extraordinary, unique or compelling circumstances” justifying relief.
The purpose of rules setting strict time limits for filing appeals and forbidding courts from extending those time periods is to ensure the finality of judgments. The need for finality, however, must give way in extraordinary circumstances. Thus, Rule 60 (c) (6) “vests power in courts adequate to enable them to vacate judgments whenever such action is appropriate to accomplish justice.” This power, however, does not relieve a party from the “free, calculated and deliberate choices” he or she has made. Further, an attorney has a duty to insure that “matters subject to prescribed time limits are acted upon within those limits, or that other appropriate action is taken to preserve a client’s rights.” …
Where … an aggrieved party establishes lack of knowledge that judgment has been entered, and asserts additional reasons that are so extraordinary as to justify relief, we hold that the trial court has authority under Rule 60 (c) (6) to vacate the judgment and reenter a new judgment in order to allow the party to file a timely appeal. In other words, relief under Rule 60 (c) (6) may be considered where the party did not have knowledge from any source that judgment had been entered and where there are extraordinary circumstances. … To the extent the opinion in Vital [v. Johnson, 128 ARIZ. 129, 624 P.2D 326 (App. 1980)] is
inconsistent with our holding today, it is disapproved.
An example of circumstances which may justify such relief can be found in Buckeye Cellulose Corp. v. Braggs Electric Construction Co., supra, and Smith v. Jackson Tool & Die, Inc., supra. In Buckeye Cellulose Corp., none of the parties knew that judgment had been entered so none could be said to have relied on the notice of entry of judgment, plaintiff’s counsel had made three inquiries of the clerk’s office to determine the status of the case, and counsel acted diligently after learning of the entry of judgment. Under these circumstances, the court of appeals held that the
Actually, following Varga’s approach to the governing statute one could well defend the position that the Superior Court lacks authority to authorize a delayed de novo appeal under any circumstances. Appellants believe that such a clear and simple rule would probably be salutary, and would certainly promote some of the policy goals of A.R.S. § 12-133. However, since application of the Park v. Strick and City of Phoenix v. Geyler standards would require reversal of the Rule 60 order herein appealed from, such extreme limitation of the Superior Court’s discretion is not necessary to the decision of this case.
trial court had authority to vacate the judgment under Rule 60 (b) (6) in order to permit the filing of a notice of appeal.
In Jackson Tool & Die, counsel for the plaintiff was out of the country when he was advised that a decision had been reached in his client’s case. Counsel immediately contacted the trial judge, requesting that entry of judgment be withheld until his return. Opposing counsel did not object to this request but did submit a form of judgment and the trial judge, without the knowledge of either counsel, entered judgment. In addition, the clerk inadvertently failed to send the required notice to the parties. When plaintiff’s counsel learned of the entry of judgment, he moved promptly to set the judgment aside. Park v. Strick, 137 ARIZ. 100, 104-05, 669 P.2D 78 (1983) (citations omitted).
In Vital v. Johnson, our court of appeals held that Rule 60(c) could not be used to relieve a party from a judgment when that party’s objection was to have the judgment vacated and then reentered, so as to permit delayed appeal. We disapproved the Vital rule in Park v. Strick, where we held that Rule 60(c)(6) could be utilized for such a purpose when the “aggrieved party establishes a lack of knowledge that judgment has been entered, and asserts additional reasons that are so extraordinary as to justify relief … .”
In recent times other courts have become less devoted to applying the strict letter of procedural law and more concerned with equitable disposition on the merits. However, there is a “compelling interest in the finality of judgments” which should not lightly be disregarded. In considering whether to allow a delayed appeal, the trial judge should, therefore, remember that the party seeking relief has had his day in court since the case has already been litigated on its merits. In such a situation, the principle of finality carries greater weight than when the movant is seeking relief from judgment by default. A stronger showing, therefore, should ordinarily be required to justify relief. We believe the criteria established by an en banc panel of the 9th Circuit in Rodgers v. Watt [722 F.2D 456, 460 (9th Cir. 1983)] adequately address these concerns:
“Specifically we hold that in determining whether Rule 60(b) is applicable (in a delayed appeal situation) a court should consider (1) absence of Rule 77(d) notice; (2) lack of prejudice to respondent; (3) prompt filing of a motion after actual notice; and (4) due diligence, or reason for lack thereof, by counsel in attempting to be informed of the date of the decision.”
These factors, combined with a showing under Park v. Strick, supra, of “extraordinary,” “unique,” or “compelling” circumstances, establish the proper standard for determining whether to grant Rule 60(c) relief. The party seeking delayed appeal must, therefore, not only make the showing generally require for relief under Rule 60(c), but must also meet the more stringent standards of Rodgers v. Watt, supra.
In the case at bench, the notice was sent, but mistakenly interpreted by counsel, who now claims that this was the type of “inadvertence,
mistake or excusable neglect” recognized as grounds for relief under Rule 60(c)(1).
* * *
In seeking relief under Rule 60(c), defendants’ counsel filed an affidavit, the facts of which stand uncontroverted. … The affidavit contains a clear averment that defense counsel believed that the date stamped “Received: Oct 24” was the date on which judgment was filed and that he neither realized that the judgment had been filed and entered on October 22 nor that the October 24 date was simply the date on which the mail room had received the minute entry copy to be mailed to counsel.
* * *
… If defense counsel had been in doubt as to the date on which the order was entered, he would have been inexcusably negligent in failing to do any one of a number of things which might have resolved the confusion. The problem with this line of reasoning is that counsel had no doubt as to the date on which the judgment was entered. Because of his mistake as to the date of filing, he had carefully but erroneously computed the time in which to file the motion.
* * *
We turn, then, to the four-part Rodgers v. Watt analysis (see ante at 1077 [144 ARIZ. at 328]) to determine whether to grant relief to permit delayed appeal. The first factor, absence of notice, is satisfied by the facts in this case. As in Park v. Strick, here there was more than a mere failure to receive the notice required by Rule 77(g). In Park there was a lack of notice, while in the case at bench there was late and confusing notice resulting in an error in calendaring the time for filing. The result is the same — counsel was unaware of the date on which the judgment was entered.
* * *
… We remand to the trial court to determine whether the circumstances were so “extraordinary,” “unique,” or “compelling” as to justify relief under Rule 69(c)(1) or (6) for the sole purpose of allowing defendants to take a delayed appeal. This decision should be made according to the standards set out ante at 1077 [144 ARIZ. at 328]. City of Phoenix v. Geyler, 144 ARIZ. 323, 328, 330-333, 697 P.2D 1073 (1985)
(citations omitted).
The teaching of Park v. Strick could not be plainer: Rule 60 relief for purposes of delayed appeal “may be considered [only] where the party did not have knowledge from any source that judgment had been entered and where there are extraordinary circumstances.” In City of Phoenix v. Geyler, appellant’s attorney did not, subjectively, have accurate knowledge as to the date of entry of judgment because the only notice he
received was “late and confusing.” In this case, by contrast, there has never been any dispute that Plaintiff’s attorney not only received actual and accurate notice in timely fashion, but also in fact had accurate subjective knowledge as to the entry of the arbitrator’s award. The defect arose entirely in what Plaintiff’s attorney did or caused to be done on the basis of that knowledge once he had it.
Park and Geyler and the three federal cases cited with approval therein all have one thing in common: would-be appellant’s lack of knowledge, or accurate knowledge, as to the entry of judgment, resulting from omission of, or some deficiency in, the notice of entry of judgment provided to such party. The most Geyler could be read as doing to Park’s explicit requirement that the would-be appellant must not have had knowledge from any source that judgment had been entered is adding the somewhat obvious qualification that the appellant must not have had accurate knowledge as to the date of entry of judgment (thus allowing for the possibility of an incorrect or otherwise misleading notice causing appellant to know that judgment has been entered but inducing in him an incorrect belief as to the date of entry of judgment). Here, it is uncontroverted that Plaintiff received adequate notice, and had accurate knowledge, concerning the entry of the compulsory arbitration award.
The first factor which must be found to justify Rule 60 “delayed appeal” relief is not satisfied in this case. The granting of delayed appeal relief was therefore a clear abuse of discretion.
conjunctive requirement for missing or defective notice and “extraordinary, unique or
compelling circumstances.” In this case, the trial judge believed that, because the judicial decision to be challenged was a compulsory arbitration award which had “become final and effective as a judgment of the Superior Court” instead of an order which had the effect of a court judgment from the moment it was entered, he did not need to find compelling circumstances but could grant Plaintiff a delayed de novo appeal on the basis of mere “excusable neglect.”
In other words, the trial court felt that, notwithstanding the expiration of the U.R.PROC.ARB. 7 (a) appeal period, the compulsory arbitration award was entitled to only an inferior degree of finality and could be more easily set aside than other judgments. Such a position is irreconcilable with the rationale and approach of Varga v. Hebern, 116 ARIZ. 539, 541, 570 P.2D 226 (1977). It conflicts with the policy goal of
A.R.S. § 12-133, which is to shorten and simplify litigation and to bring the expense of litigation into reasonable balance with the economic issue to be litigated. And it would require the elaboration, through case law, of a whole new set of intermediate standards of finality to be applied to compulsory arbitration awards.
Because it granted delayed appeal relief on the basis of mere “excusable neglect,” without finding “extraordinary, unique or compelling circumstances,” the trial court clearly abused its discretion.
Because they feel strongly that the Court of Appeals should not need to reach this issue, Defendants-Appellants will attempt to present it very briefly.
Where the responsible attorney delegates the whole responsibility for timely initiation of action to commence an appeal to an inexperienced secretary, and the
secretary applies an arbitrary misreading of the applicable rules of computation, thereby arriving at an incorrect deadline date, is the attorney’s neglect “excusable” for purposes of Rule 60 (c) (1)?
In the trial court, Plaintiff relied entirely upon authorities dealing with the setting aside of defaults, or of default judgments, under A.R.CIV.P. 55 (c). But in City of Phoenix v. Geyler, 144 ARIZ. 323, 328, 697 P.2D 1073 (1985), our Supreme Court expressly stated that “a stronger showing … should ordinarily be required” when setting aside a judgment based upon adversary presentation of the merits, as opposed to one based upon a default.
Even assuming City of Phoenix v. Geyler is wholly irrelevant because Plaintiff here seeks to challenge a compulsory arbitration award which became “final and effective as a judgment of the Superior Court,” rather than an order which always was a judgment of the Superior Court, the problem with Plaintiff’s “excusable neglect” argument is that, applying Plaintiff’s (and the trial court’s) standards, it is very difficult to imagine under what circumstances a party’s failure to file a timely notice of appeal would not be excused.
We have in this case: (1.) an attorney’s delegating the docketing of a critical date to an inexperienced secretary; (2.) the secretary’s wholly arbitrary and inexplicable disregard or misreading of the applicable rules of date-computation; and (3.) the attorney’s failure to double-check the date or confirm how the secretary arrived at it. If this is to be held to constitute excusable neglect, and delayed appeal permitted on that basis, then obviously any party who misses an appeal deadline will be able to make out an equally convincing case of “excusability.” Reference is made to Defendants’ Reply To Response To Motion To Strike “Notice Of Appeal And Motion To Set,” Index 110, pages 6-8, and the authorities there cited.
The order appealed from should be vacated, and the case should be remanded to the Superior Court for enforcement of the compulsory arbitration award which has become final and effective as a judgment of the Superior Court. Pursuant to A.R.S. § 12- 133 (I) (2) and U.R.PROC.ARB. 7 (f) as well as A.R.S. § 12-341.01 (A), Defendants- Appellants should be awarded the attorney’s fees necessitated by Plaintiff’s untimely attempt to institute a de novo appeal, including fees incurred for purposes of Defendants’ Motion to Strike, opposition to Rule 60 relief, and the present appeal.
DATED: October 25, 1996.
Brian K. Stanley
Attorney for Defendants-Appellants Roe
CERTIFICATE OF SERVICE
THE UNDERSIGNED HEREBY CERTIFIES that two (2) copies of the foregoing Brief were served upon the following:
Michael A. Fairbairn, Esq. 3600 N. Central Ave., # 520
Phoenix, Az 85012
Attorney for Plaintiff-Appellee
by depositing the same, postage prepaid, enclosed within an envelope addressed as set forth above, in the United States Mails at Phoenix on October 25, 1996.
DATED: October 25, 1996.
Brian K. Stanley
Attorney for Defendants-Appellants Roe
