Kline v. Kline

• Decision Date: 21 May 2009
• Docket Number: No. 1 CA-CV 08-0050.,1 CA-CV 08-0050.
• Citation: 221 Ariz. 564,212 P.3d 902
• Parties: In re the Marriage of Dena R. KLINE, Petitioner/Appellee, v. Michael R. KLINE, Respondent/Appellant.
• Court: Arizona Court of Appeals

212 P.3d 902

221 Ariz. 564

In re the Marriage of Dena R. KLINE, Petitioner/Appellee, v. Michael R. KLINE, Respondent/Appellant.

No. 1 CA-CV 08-0050.

Court of Appeals of Arizona, Division 1, Department D.

May 21, 2009.

Paul M. Crane Attorney at Law by Paul M. Crane, Phoenix, Attorneys for Petitioner/Appellee.

C. Robert Collins Attorney at Law by C. Robert Collins, Phoenix, Attorneys for Respondent/Appellant.

OPINION

SWANN, Judge.

¶ 1 This appeal seeks review of default judgments entered in two related cases, a family court case and a civil case. We must decide whether an award of spousal maintenance by default judgment is valid under ARFLP¹ 44(G) when the specific demand for maintenance was first contained in an amended pleading that was never served. We hold that such an award is not valid, unless the lack of proper service could not have caused prejudice to the defaulting party. Because the defaulting party in this case was fully and timely aware of the request for spousal maintenance and therefore not prejudiced by the lack of service of the amended pleading, we affirm the trial court's default award of maintenance in the family court case. For the reasons discussed below, we also affirm the court's default judgment in the related civil case.

FACTUAL AND PROCEDURAL HISTORY

I. The Family Court Case

¶ 2 Dena R. Kline ("Wife") and Michael R. Kline ("Husband") married on July 8, 1994. On April 26, 2004, Wife filed for dissolution. This action, in which Husband was represented by attorney Meyer Ziman ("Ziman"), was dismissed for lack of personal jurisdiction on March 7, 2005. On October 6, 2005, Wife filed a second petition for dissolution. The same day, she effected personal service of her petition and summons (the "Original Petition") on Husband.

¶ 3 The Original Petition made no specific demand for spousal maintenance. On October 13, 2005, Wife filed a first amended petition (the "Amended Petition"), which added a specific demand for spousal maintenance. Wife claims that Ziman, Husband's former counsel in the first divorce action, was provided a copy of the Amended Petition immediately thereafter, but nothing in the record indicates that the Amended Petition was ever served, and the Amended Petition itself does not contain a certificate of service.

¶ 4 On November 10, 2005 the law firm Collins & Collins ("Collins") entered a "notice of special appearance" on behalf of Husband to contest personal jurisdiction, based on Husband's regular presence in Canada. On February 24, 2006, after evidentiary hearings to resolve issues of jurisdiction, the trial court ruled that it had all necessary jurisdiction. The trial court clarified this ruling several times at Husband's request and we later upheld the ruling on special action.

¶ 5 On June 8, 2006, Wife filed and served a petition for temporary orders, in which she sought a temporary award of spousal maintenance. The court conducted an evidentiary hearing on temporary orders on September 14, 2006. Collins appeared at the hearing, still purporting to be "specially appearing" despite the conclusive rulings concerning jurisdiction months earlier. During the hearing, Collins expressly confirmed his knowledge of the Amended Petition's request for spousal maintenance. The court ordered Husband to pay temporary spousal maintenance in the amount of $5,000 per month, retroactive to November 1, 2005.

¶ 6 By November 21, 2007, Husband had still not responded to the Original Petition or Amended Petition, and Wife filed an application for entry of default. Wife sent a copy of the application to Collins, who did not respond. The court held a default hearing on December 17, 2007. Husband had notice of the hearing, but did not attend. The court approved the factual findings and conclusions of law proposed by Wife and entered multiple default judgments against Husband. One of these awards was for spousal maintenance in the amount of $5, 000 per month through December 31, 2012.²

II. The Civil Case

¶ 7 Monterra, LLC sued Wife, claiming an ownership interest in the marital residence. On September 23, 2005, Wife filed a third-party complaint against Husband, which was properly served. The third-party complaint alleged that Husband wrongly quit-claimed his interest in the marital residence to Monterra, which was the alter ego of Ziman. Wife requested quiet title to the house, damages for fraudulent transfer, damages for civil conspiracy to commit fraud and breach of fiduciary duty, and punitive damages. Because some of the issues in the civil case were relevant to issues in the family court case, both cases were assigned to the same judge and given the same family court cause number.

¶ 8 On April 4, 2007, Wife filed an application for entry of default because Husband had not responded to the third-party complaint. A copy of the application was sent to Husband, who once again did not timely respond. Upon Wife's motion, copied to Husband, a default hearing was held on October 1-2, 2007. Husband was not present at the hearing either in person or through counsel, although Ziman and Collins were present to testify.

¶ 9 On October 31, 2007, Wife lodged her proposed findings of fact and conclusions of law. A copy was mailed to Husband. On November 7, 2007, the court ordered that if no objections were filed by November 16, 2007, the lodged document would be approved. No objections were filed. On November 21, 2007, the court approved the proposed findings and ordered that Husband pay compensatory damages in the amount of $285,155.56 and punitive damages in the amount of $100,000.

¶ 10 Husband timely appeals the default judgments entered in both cases. We have jurisdiction pursuant to Arizona Revised Statutes ("A.R.S.") section 12-2101(B) (2003).

DISCUSSION

I. Family Court Case

A. Appealability

¶ 11 Generally, a default judgment is not appealable. Rather, only an order setting aside or refusing to set aside the judgment is appealable. See Sanders v. Cobble, 154 Ariz. 474, 475, 744 P.2d 1, 2 (1987); Byrer v. A.B. Robbs Trust Co., 105 Ariz. 457, 458, 466 P.2d 751, 752 (1970). There are, however, exceptions to the general rule. A default judgment is appealable when there is a question regarding personal or subject matter jurisdiction, or when there is a question regarding the validity of the default judgment pursuant to Ariz. R. Civ. P. 55. Hirsch v. Nat'l Van Lines, Inc., 136 Ariz. 304, 311, 666 P.2d 49, 56 (1983).

¶ 12 Here, Husband attacks the validity of the default judgment pursuant to ARFLP 44(G).³ Because this rule is analogous to Arizona Rule of Civil Procedure 55, Husband may appeal the default judgment on this ground. See Cmt., ARFLP 44.

B. Pleading Standards

¶ 13 The Arizona Rules of Family Law Procedure generally apply to all family law cases pending as of January 1, 2006.⁴ Those rules replace the Arizona Rules of Civil Procedure in family cases except where the civil rules are expressly incorporated. ARFLP 2(A). Where the language of the family law rules is substantially the same as the language of other statewide rules, case law interpreting that language is applicable. Cmt., ARFLP 1.

¶ 14 ARFLP 44(G) provides that "every final judgment shall grant the relief to which the party in whose favor it is rendered is entitled ... even if the party has not requested such relief in the party's pleadings, except that awards of spousal maintenance ... must be specifically pled for such relief to be granted through a default judgment." (Emphasis added.) By its terms, ARFLP 44(G) prescribes a more rigorous notice requirement regarding claims for spousal maintenance than other family law claims. If this language is to have any meaning at all, the Original Petition in this case cannot form the basis of an award of spousal maintenance because it made no demand for that relief.

¶ 15 Before spousal maintenance can be awarded in a default judgment, three requirements must be satisfied: (1) spousal maintenance must be specifically requested; (2) the request must be made in a pleading; and (3) the defendant must have legally adequate notice of the pleading.

¶ 16 The initial document requesting relief in a dissolution proceeding, which is called the "petition," is a "pleading." ARFLP 3(B)(4), 24(A). In contrast, a motion is broadly defined as "a written request made after a petition seeking relief is filed." ARFLP 3(B)(2). Despite the identical labels, therefore, a "petition" for pendente lite temporary orders in the family law context is actually a motion rather than a pleading. See ARFLP 47(A)(3) (placing the description of the process for obtaining such an order under the subheading "Motions for Pre-Decree or Pre-Judgment Temporary Orders"); see also Hon. Norman J. Davis, A Reference Guide to the New Family Court Rules, Arizona Attorney, Feb. 2006, at 42, 44 (noting that there has historically been confusion regarding the proper use of the terms "petition," "motion," and "application," and noting that a request for temporary orders is a motion). Accordingly, the only document in the record that could form the basis for the default judgment is the Amended Petition.

C. Adequacy of Service

¶ 17 Unless specifically exempted, all pleadings require service upon each of the parties. See Ariz. R. Civ. P. 5(a); ARFLP 43(A). Amended complaints or petitions are not specifically exempted, and therefore must be served. See Ariz. R. Civ. P. 15; ARFLP 34.

¶ 18 The rules governing service differ significantly depending on whether a party to be served has made an "appearance." Compare Ariz. R. Civ. P. 4 and ARFLP 41 with Ariz. R. Civ. P. 5(c) and ARFLP 43(C). In Arizona, an "appearance" for purposes of the rules is synonymous with a "general appearance."⁵ See Burton, 205 Ariz, at 29, ¶ 8, 66 P.3d at 72 (using the terms interchangeably). A party has made a general appearance when he has taken any action, other than objecting to personal jurisdiction, that recognizes the case is pending in c...