American Asphalt v. Cmx llc/cmx Group Inc

SUPREME COURT OF ARIZONA
En Banc
AMERICAN ASPHALT & GRADING ) Arizona Supreme Court
COMPANY, an Arizona corporation, ) No. CV-10-0324-PR
)
Plaintiff/Appellant, ) Court of Appeals
) Division One
v. ) No. 1 CA-CV 09-0634
)
CMX, L.L.C., an Arizona limited ) Maricopa County
liability company; CMX GROUP, ) Superior Court
INC., an Arizona corporation, ) No. CV2008-009602
)
Defendants/Appellees. )
)
) O P I N I O N
__________________________________)
Appeal from the Superior Court in Maricopa County
The Honorable John A. Buttrick, Judge
VACATED AND REMANDED
________________________________________________________________
Memorandum Decision of the Court of Appeals Division One
Filed Jul. 22, 2010
VACATED
________________________________________________________________
LANG BAKER & KLAIN PLC Scottsdale
By Kent A. Lang
William G. Klain
Michael Walter Thal
And
PAUL G. ULRICH P.C. Phoenix
By Paul G. Ulrich
Attorneys for American Asphalt & Grading Company
FOLK & ASSOCIATES P.C. Phoenix
By P. Douglas Folk
Benjamin L. Hodgson
Christopher D.C. Hossack
Attorneys for CMX LLC and CMX Group Inc.
And
COMMITTEE ON SUPERIOR COURT
BY Hon. James Soto, Chair
Amicus Curiae Committee on Superior Court
_______________________________________________________________
B R U T I N E L, Justice
¶1 Arizona Rule of Civil Procedure 38.1(e) requires the
superior court to “promptly notify counsel in writing of the
placing of cases on the Inactive Calendar.” We hold that a
notice issued several months prior to placing the case on the
Inactive Calendar does not comply with this rule.
I.
¶2 In April 2008, American Asphalt and Grading Company
(“American Asphalt”) sued CMX, L.L.C., for professional
negligence and breach of implied warranty. On October 1, 2008,
the Maricopa County Superior Court issued an order (“150-Day
Order”) informing American Asphalt that if it did not file a
Motion to Set and Certificate of Readiness as required by Rule
38.1(a), the case would be placed on the Inactive Calendar after
January 20, 2009, and dismissed without further notice on or
after March 23, 2009.
¶3 American Asphalt did not file a Motion to Set and the
case was dismissed without further notice on April 29, 2009.
American Asphalt then promptly moved under Arizona Rules of
Civil Procedure 60(c)(1) and (6) to set aside the dismissal.
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American Asphalt contended that its failure to comply with Rule
38.1(a) was excusable because it had substituted counsel around
the time of the Rule 38.1(d) filing deadline. The superior
court denied the motion. The court of appeals affirmed, finding
no excusable neglect partly because “the 150-Day Order provided
the notice required in Rule 38.1(e).” American Asphalt &
Grading Co. v. CMX, L.L.C., 1CA-CV 09-0634, 2010 WL 2889471, at
*3 ¶¶ 13-15 (Ariz. App. July 22, 2010) (mem. decision).
¶4 We granted review to clarify the requirements of Rule
38.1(e). We have jurisdiction under Article 6, Section 5(3) of
the Arizona Constitution and A.R.S. § 12-120.24 (2003).
II.
¶5 Arizona Rule of Civil Procedure 38.1(d) requires that
“every case in which a Motion to Set and Certificate of
Readiness has not been served within nine months after the
commencement thereof” shall be placed on the “Inactive
Calendar.” Under that rule, cases remaining on the Inactive
Calendar for two months without either the filing of a Motion to
Set or a court order allowing continuance on that Calendar
“shall be dismissed without prejudice for lack of prosecution.”
Rule 38.1(e) states:
The clerk of the court or court administrator,
whoever is designated by the presiding judge, shall
promptly notify counsel in writing of the placing
of cases on the Inactive Calendar, and no further
notice shall be required prior to dismissal.
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¶6 American Asphalt argues that the 150-Day Order did not
satisfy Rule 38.1(e) because the order did not issue when the
case was placed on the Inactive Calendar. We use rules of
statutory construction to interpret court rules. See Preston v.
Kindred Hosps. W., L.L.C., 226 Ariz. 391, 393 ¶ 8, 249 P.3d 771,
773 (2011). And we do not look beyond a rule’s language if it
is clear and unambiguous. Id.¶7 Read in isolation, the phrase “of the placing of cases
on the Inactive Calendar,” rather than “when a case is placed on
the Inactive Calendar,” could be read to mean that Rule 38.1(e)
is satisfied if attorneys are notified at any time that cases
will be placed on the Inactive Calendar on some specified future
date. Under that interpretation, Maricopa County’s 150-Day
Order would comply with the rule.
¶8 Based on the rule’s directive that the court shall
“promptly” notify counsel of the placement of cases on the
Inactive Calendar, however, we conclude that Rule 38.1(e)
requires contemporaneous (or nearly contemporaneous) notice when
a case is placed on the Inactive Calendar. As noted above, Rule
38.1(d) directs the court to “place on the Inactive Calendar
every case in which a Motion to Set and Certificate of
Readiness” are not served within nine months. Rule 38.1(e), by
requiring the court to “promptly notify counsel in writing of
the placing of cases on the inactive calendar,” is most
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plausibly read to refer to notice when the action identified in
Rule 38.1(d) occurs– that is, when the case is actually placed
on the Inactive Calendar. Any other interpretation would imply
that the court’s placing a case on the Inactive Calendar under
Rule 38(d)(1) means something different than the “placing of
cases on the Inactive Calendar” in Rule 38.1(e).
¶9 Construed most reasonably and in context, Rule 38.1(e)
requires notification when a case is placed on the Inactive
Calendar. Because the 150-Day Order did not notify American
Asphalt when the case was placed on the Inactive Calendar, but
rather gave notice only of the court’s intention to do so in the
future, the order did not comply with Rule 38.1(e).
¶10 In so holding, we do not disapprove of Maricopa
County’s 150-Day Order, which provides useful advance notice to
counsel. But local practices must comport with and cannot
supplant the rules of civil procedure. See State ex. rel.
Romley v. Ballinger, 209 Ariz. 1, 2 ¶ 6, 97 P.3d 101, 102 (2004)
(emphasizing that superior courts have no authority to abridge
rules of civil procedure).
¶11 Having found that the notice provided did not comply
with Rule 38.1(e), we next consider the consequences. We reject
American Asphalt’s argument that the superior court’s judgment
was void ab initio. See Cockerham v. Zikratch, 127 Ariz. 230,
234, 619 P.2d 739, 743 (1980) (explaining that void judgments
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are those rendered by a court lacking jurisdiction over subject
matter or parties whereas erroneous judgments are those issued
by courts with jurisdiction, but subject to reversal on appeal).
Rather, we adopt the approach taken in Copeland v. Arizona
Veterans Memorial Coliseum & Exposition Center, 176 Ariz. 86,
859 P.2d 196 (App. 1993). There, the court of appeals applied
our decision in Jepson v. New, 164 Ariz. 265, 792 P.2d 728(1990), to conclude that lack of notice is one factor, among
many, that a court should consider in ruling on a Rule 60(c)
motion. See Copeland, 176 Ariz. at 89-90, 859 P.2d at 199-200.
¶12 Here, unlike Copeland, American Asphalt did receive
notice, albeit not the notice required under Rule 38.1(e), of
the consequences of failing to file a Motion to Set. Express
notice was set forth in the 150-Day Order (printed on a pink
sheet of paper) as well as in Rule 38.1(d). Nonetheless, in an
excess of caution, we vacate the court of appeals’ decision and
remand the case to the superior court because the record does
not make clear whether that court considered the 150-Day Order
dispositive. On remand, the superior court should follow the
analysis in Copeland and determine what effect, if any, the
absence of Rule 38.1(e)-compliant notice had on the conduct of
counsel.
_____________________________________
Robert M. Brutinel, Justice
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CONCURRING:
_____________________________________
Rebecca White Berch, Chief Justice
_____________________________________
Andrew D. Hurwitz, Vice Chief Justice
_____________________________________
W. Scott Bales, Justice
_____________________________________
A. John Pelander, Justice
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