Creach v. Angulo

• Decision Date: 24 June 1997
• Docket Number: No. CV,CV
• Parties: , 246 Ariz. Adv. Rep. 3 Richard CREACH and Alice Creach, d/b/a Creach Construction, Plaintiffs/Appellees, v. William ANGULO and Noemi Angulo, Defendants/Appellants. 96-0243-PR.
• Court: Arizona Supreme Court

Page 224

941 P.2d 224

189 Ariz. 212, 246 Ariz. Adv. Rep. 3

Richard CREACH and Alice Creach, d/b/a Creach Construction, Plaintiffs/Appellees, v. William ANGULO and Noemi Angulo, Defendants/Appellants.

No. CV 96-0243-PR.

Supreme Court of Arizona,

In Banc.

June 24, 1997.

[189 Ariz. 213] Law Office of Daniel F. Furlong by Daniel F. Furlong, Prescott, for Plaintiffs/Appellees.

Goodman Law Firm, P.C. by Thomas M. Stoxen, Mark N. Goodman, Prescott, for Defendants/Appellants.

OPINION

JONES, Vice Chief Justice.

Creach Construction, owned by Richard and Alice Creach (the Creaches), contracted with California residents William and Noemi Angulo (the Angulos) to build a four-plex on property the Angulos owned in Prescott Valley, Arizona. On completion of the work, the Angulos refused to pay a portion of the agreed price, and the Creaches brought this action in the Yavapai County Superior Court to enforce the contract. The summons and complaint were served personally on the Angulos in California under Arizona Rule of Civil Procedure 4.2(b) providing for direct service outside the state. Affidavits by the California process server showing service on the Angulos at their California residence were filed with the court in Yavapai County.

The Creaches did not file an affidavit showing circumstances warranting utilization of out-of-state service, although Rule 4.2(b) requires such affidavit before a default may be entered. The Angulos failed to answer or otherwise plead to the complaint, whereupon the Creaches applied for entry of default and mailed a copy of the application to the Angulos and their attorney. Again, the Angulos made no response, and the trial court entered a default judgment against them. Only after the Angulos filed a notice of appeal did the Creaches file the required Rule 4.2(b) affidavit.

The court of appeals affirmed the default judgment, finding that "the Rule 4.2(b) affidavit of circumstances requirement is a technicality and its violation in this case was harmless error." Creach v. Angulo, 186 Ariz. 548, 552, 925 P.2d 689, 693 (App.1996). The court expressly rejected the Angulos' argument that failure to file an affidavit of circumstances constitutes reversible error. Although the argument was based on this court's opinion in Cockerham v. Zikratch, 127 Ariz. 230, 619 P.2d 739 (1980), the court of appeals found that our reference to "reversible error" in Cockerham was dictum and thus should not be treated as binding precedent. Creach, 186 Ariz. at 552, 925 P.2d at 693. We agree with the court of appeals and issue this opinion because the case raises an important matter of procedure involving out-of-state personal service and because we distinguish the instant case from our recent opinion in Postal Instant Press v. Corral Restaurants, Inc., 186 Ariz. 535, 925 P.2d 260 (1996), which addressed the related requirement under Rule 4.1(c)(2) that a party served by first-class mail within the state must sign and return a formal oath or affirmation acknowledging such service.

We have jurisdiction pursuant to Arizona Constitution article VI, section 5(3), and Rule 23 of the Arizona Rules of Civil Appellate Procedure.

DISCUSSION

A. Cockerham Dictum

The court of appeals determined that the term "reversible error" as used in Cockerham was dictum and not binding legal precedent. We said:

[T]he failure to file the affidavit of [out-of-state] service required by Rule 4(e)(2)(b), although reversible error, did not render the default judgment void for lack of personal jurisdiction where the facts to be contained in that affidavit appear in the verified complaint and affidavits of the process server.

Cockerham, 127 Ariz. at 234, 619 P.2d at 743 (emphasis added).

The court of appeals concluded:

[T]he issue before the Cockerham court was whether the technical violation prevented establishment of personal jurisdiction, not whether it would otherwise be reversible error.... It is readily apparent that the Cockerham court's statement regarding reversible error was hypothetical and not necessary to its holding.

Creach, 186 Ariz. at 551-52, 925 P.2d at 692-93.

The Cockerham defendants, as here, were personally served at their California residence and failed to file an answer. The Arizona plaintiff obtained a default judgment. When the plaintiff sought to enforce the judgment by execution sale, defendants obtained a temporary restraining order enjoining the sale, and the trial court vacated the default judgment. On appeal, this court addressed the argument that the default was void and subject to vacation under Arizona Rule of Civil Procedure 60(c)(4) because the trial court lacked jurisdiction over the defendants due to plaintiff's failure to file the affidavit showing circumstances warranting service outside the state. ¹ We concluded that information contained in the verified complaint and the affidavits of service by the process server furnished sufficient facts to warrant the use of out-of-state service and to establish personal jurisdiction. The absence of an affidavit of circumstances in Cockerham thus did not deprive the court of personal jurisdiction over the defendants, and the default judgment was not void.

Our conclusion that the Cockerham judgment was valid did not necessitate reference to "reversible error" in connection with the missing affidavit. To have found mere "error" would have been sufficient. The court of appeals in the instant case correctly determined the reference was dictum, and perhaps misleading. Clearly, it is error for a court to justify a litigant's failure to file an affidavit required by a rule of civil procedure. The question is not whether error occurred, but whether it is harmless, that is, whether it is of such technical, non-prejudicial character that neither party may raise a legitimate or meritorious basis of complaint.

Reversible error is, "[i]n appellate practice, such an error as warrants the appellate court in reversing the judgment before it; substantial error, that which reasonably might have prejudiced the party complaining." Black's Law Dictionary 543 (6th ed.1990); see State v. Brady, 105 Ariz. 190, 196, 461 P.2d 488, 494 (1969) ("This Court has held many times that in order to justify a reversal an error must be prejudicial under the facts of the case.").

We reject the notion that the term "reversible error" in Cockerham suggests a rule that must govern every case involving a missing 4.2(b) affidavit of circumstances. The court of appeals correctly stated:

To justify the reversal of a case, there must not only be error, but the error must have been prejudicial to the substantial rights of the party. State v. Whitman, 91 Ariz. 120, 127, 370 P.2d 273, 278 (1962); see also Ariz. Const. art. 6, § 27 (prohibiting reversal of a cause for technical error in pleading or proceedings). Furthermore, prejudice is not presumed but must appear from the record. Whitman, 91 Ariz. at 127, 370 P.2d at 278. Otherwise, the error is deemed harmless. Id. Rule 61 of the Arizona Rules of Civil Procedure defines harmless error as follows: "No error or defect ... in anything done or omitted by the court or by any of the parties is ground for ... vacating, modifying or otherwise disturbing a judgment or order, unless refusal to take such action appears to the court inconsistent with substantial justice. The court at every stage of the proceeding must disregard any error or defect in the proceeding which does not affect the substantial rights of the parties."

Creach, 186 Ariz. at 550, 925 P.2d at 691. Accordingly, whether failure to file the Rule 4.2(b) affidavit is reversible depends on the specific circumstances of each case.

B. Harmless Error

The court of appeals found that violation of the affidavit requirement did not prejudice any substantial right of the Angulos and that the entry of default judgment was not inconsistent with substantial justice. 186 Ariz. at 552, 925 P.2d at 693. To reach this conclusion, the court analyzed the purpose of the requirement:

[W]e believe the affidavit was intended to provide assurance to the trial court that its assertion of personal jurisdiction was constitutionally permissible. Such assurance was...