IN THE COURT OF APPEALS

STATE OF ARIZONA

DIVISION ONE

ALLIED SIGNAL LAMINATE ) 1 CA-TX 95-0012

SYSTEMS, INC., a Delaware

Corporation,

DEPARTMENT C

Petitioner-Appellee,)

vs. ) MEMORANDUM DECISION

) (Not for Publication -

MARICOPA COUNTY, a political ) Rule 28, Arizona Rules

subdivision of the State of ) of Civil Appellate Procedure)

Arizona; THE ARIZONA )

DEPARTMENT OF REVENUE, )

Defendants-Appellees.)

_________________________________________ )

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Appeal from the Arizona Tax Court

Cause No. TX 93—01132
The Honorable William J. Schafer, III, Judge

REVERSED

Broening, Oberg, Woods, Wilson & Cass
By Terrence P. Woods and Michael M. Haran
Attorneys for Appellant Phoenix

Trompeter, Schiffman, Petrovits, Friedman & Hulse
By Jack B. Schiffman
Attorneys for Appellee Maricopa County Phoenix

L A N K F O R D, Judge

Allied Signal appeals the Tax Court*s denial of Allied signal*s motion to set aside a judgment of dismissal against it and its alternative motion for permission to refile a new action under the "savings" statute, Ariz. Rev. Stat. Ann. ("A.R.S.") section 12— 504(A) (1992). We hold that the court abused its discretion in denying Allied Signal*s motion to set aside the judgment and we therefore reverse this case and remand with directions to set aside the judgment of dismissal.

Allied Signal brought this action to contest what it argued was an excessive valuation of its property in the 1993 tax year. Prior to the date set for trial, Allied Signal and defendant Maricopa County negotiated a settlement.

The settlement was conditioned on approval by the Maricopa County Board of Supervisors and on proof by Allied Signal that it had paid any past due property taxes. Furthermore, the settlement would not be effective until entry of judgment by the Tax Court.

The settlement was approved by the Board of Supervisors in October of 1994, but Allied Signal*s attorney did not prepare a stipulated judgment form for the County Attorney*s signature. Meanwhile, the Tax Court had placed the case on its inactive calendar and informed the parties that the action would be dismissed without further notice unless a certificate of readiness was filed or a final judgment was entered by November 29, 1994.

Allied Signal claims that it responded to the court*s notice by examining its case files to determine the status of the settlement. It claims that a temporary secretary confused the action based on the 1993 valuation of Allied Signal*s property with another challenge based on the valuation of the same property for the year 1994. The temporary secretary informed the attorney that the 1993 settlement was almost completed. In reality, it was the 1994 settlement that was almost completed, not the 1993 settlement. This version of events is supported by the secretary*s affidavit.

Allied signal*s action was dismissed without prejudice for lack of prosecution on January 24, 1995. Allied Signal filed a motion to set aside the judgment. See Ariz. R. Civ. P. Rule 60(c). The county filed a response in which it "neither oppose[d] nor support[ed]" the motion to set aside the judgment. The trial court denied the motion without explanation in an unsigned minute order filed on April 13, 1995.

Allied Signal filed a motion for reconsideration of the court*s denial of its motion to set aside the judgment. In the alternative, it requested leave to file a new action for the same cause. See A.R.S. § 12-504(A) (1992). In an unsigned minute entry filed on May 10, 1995, the court denied the motion for reconsideration but failed to address Allied Signal*s request for leave to file a new action.

Allied Signal next filed a motion requesting that the court enter a signed order on its motion to set aside the judgment or for leave to file a new action. The trial court signed an order which was filed on June 13, 1995. The signed order (1) denied Allied signal*s motion to set aside the judgment; (2) denied the motion for reconsideration of the denial of the motion to set aside the judgment; and (3) denied plaintiff*s motion for leave to file a new action. Allied Signal filed a notice of appeal from this order on June 26, 1995.

The appellee County argues that we lack jurisdiction because the notice of appeal was untimely. This argument is utterly without merit. We hold that the notice of appeal was timely filed.

The County correctly notes that Allied Signal may not appeal the trial court*s judgment dismissing its action for failure to prosecute. That judgment was filed on January 24, 1995, over six months before Allied Signal filed its notice of appeal. Because "[a) notice of appeal . . . shall be filed . . . not later than 30 days after entry of judgment," Ariz. R. Civ. App. P. Rule 9(a), an appeal of the judgment of dismissal would be untimely.

Allied Signal is not appealing the judgment of dismissal, however. It is appealing the trial court*s denial of its Rule 60(c) motion to set aside the judgment and the denial of its motion for leave to refile the complaint under A.R.S. section 12-540(A). In particular, it appeals the tax court*s signed order of June 13, 1995 in which the court formally denied Allied Signal*s post-judgment motions. If it is true that the time for filing a notice of appeal began to run on June 13, 1995, then Allied Signal*s notice - - filed on June 26, 1995 - - was timely.

The County argues that the time for filing a notice of appeal began to run on April 13, 1995, the day on which the tax court issued a minute entry order denying Allied Signal*s motion to set aside the judgment. We do not agree because a minute entry order, like any other form of judgment, is not effective as an appealable order unless it is signed. See Ariz. R. Civ. P. Rule 58(a) (requiring that all judgments be in writing and signed); Ariz. R. Civ. P. Rule 54(a) (defining a judgment as an appealable order). Neither of the legal propositions relied on by the court in Sahlin are good law today. First, a motion to set aside a judgment under Rule 60(c) does not extend the time during which an appeal may be filed. Arizona Prop. & Cas. Ins. Guar. Fund v. Lopez, 177 Ariz. 1, 3, 864 P.2d 558, 560 (App. 1993). Second, "[a]n order denying or granting a motion to set aside a judgment under Rule 60(c) . . . is appealable as a ‘special order made after final judgment. A.R.S. § 12-2101(C)." H & H Auto Storage Pool v. Chemical Waste Mgmn*t, 164 Ariz. 139, 141, 791 P.2d 665, 667 (App. 1990). Under present law, the denial of the motion to set aside the judgment is itself an appealable order, so a signature is required to make the court*s denial of the motion effective for purposes of appeal. The tax court*s denial of Allied Signal*s motion to set aside the judgment and of its motion for relief under section 12—540 was not effective for purposes of appeal until the court signed the order dated June 13, 1995. See Hyman v. Arden-Mayfair, Inc., 150 Ariz. at 446, 724 P.2d at 65 (noting that an appeal of an unsigned minute entry order denying a motion to set aside the judgment was premature, but holding that the premature filing was cured because the trial court entered a signed, written order denying Rule 60(c) relief). The notice of appeal filed on June 26, 1995 was timely.

II.

Allied Signal argues that the tax court abused its discretion in denying its motion to set aside the judgment. We agree.

Rule 60(c) of the Arizona Rule of Civil Procedure provides in pertinent part:

On motion and upon such terms as are just the court may relieve a party . . . from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect . . .

A trial court*s denial of Rule 60(c) relief is reviewed for a "clear abuse of discretion." Hyman v. Arden-Mayfair, Inc., 150 Ariz. at 447, 724 P.2d at 66.

"[T]o obtain relief: under Rule 60(c) (1) from a Rule V(e) dismissal for lack of prosecution, a plaintiff generally must show (1) mistake, inadvertence, surprise or excusable neglect; (2) that relief was sought promptly; and (3) that a meritorious claim existed." Copeland v. Arizona Vet. Mem. Coliseum & Exposition Center, 176 Ariz. 86, 89, 859 P.2d 196, 199 (App. 1993) (citing Jepson v. New, 164 Ariz. 265, 272—73, 792 P.2d 728, 735—36 (1990)). Questionable cases should be decided in favor of granting Rule 60(C) relief from dismissals for failure to prosecute:

[T]rial courts should consider carefully a Rule 60 motion. to set aside a Uniform Rule V(e) dismissal when, as here, there is evidence that (1) the parties were vigorously pursuing the case, (2) the parties were taking reasonable steps to inform the court of the case*s status, and (3) the moving party will be substantially prejudiced by, for example, the running of the limitations period if the dismissal is not set aside. If all these factors are present, even doubtful cases should be resolved in favor of the party moving to set aside the dismissal.

Gorman v. City of Phoenix, 152 Ariz. 179, 183-84, 731 P.2d 74, ‘78- 79 (1987).

Allied Signal has established excusable neglect. The affidavit of the temporary secretary who worked with the attorney in this case states that the secretary was informed that there was a 1993 case and a 1994 case. She was asked to check on the status of the 1993 case, which was not proceeding to settlement because the necessary paperwork had not been completed, yet she inadvertently checked the 1994 case, which was on track for settlement.. She reported to the attorney that the 1993 case was proceeding to settlement. In reliance on this report, the attorney did not check the file again until his office received notice that the case had been dismissed for lack of prosecution.

Other cases have found excusable neglect justifying Rule 60(c) relief under similar circumstances. In Coconino Pulp & Paper Co. v. Marvin, 83 Ariz. 117, 121, 317 P.2d 550, 553 (1957) our supreme court held that the trial court abused its discretion in refusing to set aside a default judgment entered against a defendant in a civil lawsuit. In that case, a legal secretary responsible for distributing calendar sheets for the purpose of reminding attorneys of the need to prepare and file pleadings failed to give one of the attorneys a calendar sheet. Id. at 119, 317 P.2d at 551. The attorney failed to file an answer and, when he called opposing counsel to request an extension of time, he was told that a default judgment had been entered. Id. In finding that the legal secretary*s failure to provide the calendar sheet to the attorney constituted excusable neglect, the court wrote

[I]n a large law firm, with many lawsuits in the various courts, the problem of determining the respective times within which appearances must be made is one that reasonably requires the services of a secretary whose duty it is to keep informed as to the status of all litigation and in turn remind the attorneys of the condition of the calendar with respect to the cases being handled by them . . . [A]bsent some showing of inefficiency or undependability of the secretary, the attorneys should be justified in assuming that they will be properly informed concerning the status of their cases. Any reasonable person under such circumstances would place reliance upon the proper performance of the services of such a secretary. If through some inadvertent clerical error the lawyer is not informed, his conduct resulting therefrom we believe is excusable.

Id. at 120-21, 317 P.2d at 552.

In another case, Thunderbird Farms v. Hernandez, 11 Ariz. App. 383, 384, 464 P.2d 829, 830 (1970), Division Two of this Court upheld a trial court*s order granting Rule 60(c) relief to the plaintiff after his case had been dismissed for lack of prosecution. The basis for granting Rule 60(c) relief was that the notice that the case had been placed on the inactive calendar was not received or, if it had been, it had been misplaced by a new secretary. Id. "Had the trial judge [in Hernandez] not set the order [of dismissal] aside on the record before him, Division 2 would have been hard pressed not to have held that the judge had abused his discretion." Ursel v. Pizzo, 126 Ariz. 316, 319, 614 P.2d 858, 861 (App. 1980).

Similarly, in Kohlbeck v. Handley, 3 Ariz. App. 469, 472, 415 P.2d 483, 486 (1966), the court affirmed the trial court*s decision to grant Rule 60(c) relief to the defendant against whom a default judgment had been entered for the defendant*s failure to answer the complaint. The reason defendant failed to answer the complaint was that defendant*s attorney was not reminded by his new legal secretary that the answer was due. Id. at 471, 415 P.2d at 486. The court cited Coconino Pulp & Paper Co., supra, for the proposition that a legal secretary*s clerical error was excusable neglect warranting Rule 60(c) relief. Id. at 472, 415 P.2d at 486.

The County seeks to distinguish these cases by arguing that this is a case involving the neglect of an attorney rather than a legal secretary. "The usually articulated test of excusable neglect by a lawyer is whether the neglect might befall a reasonably prudent lawyer under similar circumstances." Ellman Land Corp. v. Maricopa County, 180 Ariz. 331, 339, 884 P.2d 217, 225 (App. 1994). The County argues that the attorney was negligent in his failure to draft a stipulated judgment for the County Attorney*s ‘signature prior to the dismissal of the action.

The only sworn affidavit disputes the County*s argument. The legal secretary*s affidavit states that the attorney asked her to check on the status of the 1993 tax case "when the notice that the 1993 case had been placed on the inactive calendar was received . . . ." The notice that the case had been placed on the inactive calendar informed the parties that they had at least two months before the case would be dismissed under Rule V(e). Had the legal secretary examined the correct file, she would have*learned that the stipulated judgments had not been prepared and she would have informed the attorney, giving the attorney the notice necessary to complete the work. In turn, the attorney would have had at least two months to complete the settlement. There is therefore no question of neglect, excusable or not, by the attorney.

The other factors in evaluating the propriety of Rule 60(c) (1) relief from a dismissal for failure to prosecute have been met in this case. Allied Signal promptly moved for an order setting aside the judgment when it learned of the dismissal. The dismissal was entered on January 24 and Allied Signal filed its Rule 60(c) motion on February 10. Also, there is no contention that Allied Signal*s suit was not meritorious and the pending settlement indicates that it had some merit.

We conclude that Allied Signal established its entitlement to Rule 60(c) (1) relief from dismissal for failure to prosecute. Our decision accords with the purposes of Uniform Rule V:

Uniform Rule V should be used to dispose of abandoned cases and to encourage litigants to resolve their disputes quickly. It should not be used to trap the unwary or the momentarily negligent. The purpose of Uniform Rule V(e) is procedural, not substantive; the rule is merely "a convenient administrative practice" designed to rid court calendars of inactive or abandoned cases . . . .

Gorman v. City of Phoenix, 152 Ariz. 179, 183, 731 P.2d 74, 78 (1987). The rule "was not intended to place a sword in the hands of defendants* attorneys which will enable them to abruptly terminate litigation if their opponents miss a deadline." Campbell v. Deddens, 93 Ariz. at 250, 379 P.2d at 965. In this case, the parties had reached an agreeable settlement that was approved by the County Board of Supervisors. Once the court dismissed the case without prejudice for lack of prosecution, the County refused to deal with Allied Signal, presumably because it knew that the statute of limitations had expired so that Allied Signal* could not file a new action.

We hold that the trial court abused its discretion in denying Allied Signal*s requested Rule 60(c) relief. We therefore remand this case to the Tax Court and direct it to set aside the judgment of dismissal

 

 

© 1996 Michael G. Galloway

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