Harper v. Canyon Land Development, LLC. (12/23/2008)

January 6, 2009

Arizona Court of Appeals Division One Holds that Motion to Set Aside Entry of Default and a Default Judgment Based on Excusable Neglect May Be Filed Within Six Months of the Entry of Judgment.

Harper filed a complaint against Canyon Land Development (“CLD”) and served the complaint on CLD’s statutory agent.  The agent forwarded the documents as required, CLD failed to answer, Harper moved for entry of default, CLD failed to plead in response, and the default thus became effective 10 days after the application for entry of default.  The trial court eventually entered judgment in late December of 2006.

Months later, more than 6 months from the application for entry of default but less than 6 months from the entry of judgment, CLD moved to set aside the judgment under Rules 55(c) and 60 (c)(1) and (c)(6).  The Superior Court denied relief, explaining that the motion was not timely filed because more than 6 months had passed since the entry of default.

After canvassing decisions from other states and the federal courts, the Court of Appeals reversed.  The Court first explained that an entry of default by the Clerk of Court in accordance with Rule 55(a) is merely an “interlocutory step” toward default judgment.  Thus, the 6-month limit of Rule 60(c) does not run from that action by the clerk.  Rather, Rule 60(c)(1) requires that relief be sought “not more than six months after the judgment or order was entered or proceeding was taken.”  Within the context of setting aside a default judgment, the six-month limitation in Rule 60(c) commences when the judgment is filed, not when the default is entered. 

Judge Hall authored the opinion in which Judges Winthrop and Irvine concurred.