Morrison v. Shanwick Intern. Corp.

• Decision Date: 11 September 1990
• Docket Number: No. 1,CA-CV,1
• Citation: Morrison v. Shanwick Intern. Corp., 804 P.2d 768, 167 Ariz. 39 (Ariz. App. 1990)
• Parties: David G. MORRISON and Hazel C. Morrison, husband and wife, Plaintiffs-Appellees, v. SHANWICK INTERNATIONAL CORPORATION, an Arizona Corporation; Johnny Shannon and Jane Doe Shannon, husband and wife, Defendants-Appellants. 89-326.
• Court: Arizona Court of Appeals

Page 768

804 P.2d 768

167 Ariz. 39

David G. MORRISON and Hazel C. Morrison, husband and wife, Plaintiffs-Appellees, v.SHANWICK INTERNATIONAL CORPORATION, an Arizona Corporation; Johnny Shannon and Jane Doe Shannon, husband and wife, Defendants-Appellants.

No. 1 CA-CV 89-326.

Court of Appeals of Arizona Division 1, Department E.

Sept. 11, 1990.

Review Denied Feb. 20, 1991.

[167 Ariz. 40] Lance F. Jacobs, Scottsdale, for defendants-appellants.

Apker, Apker, Haggard & Kurtz by David B. Apker, Phoenix, for plaintiffs-appellees.

OPINION

VOSS, Judge.

This is an appeal from a grant of summary judgment against defendantsShanwick International Corporation(Shanwick) and Darlene Shannon, and in favor of plaintiffsDavid G. Morrison and Hazel Morrison(the Morrisons).Appellants raise four issues ¹ for our consideration: 1) did the trial court err in granting summary judgment against Darlene Shannon; 2) did the trial court err in granting summary judgment for a claim based on A.R.S. § 12-671, the "bad check"statute; 3) did the trial court err in awarding interest in an amount higher than that provided by statute; and 4) did the trial court err in awarding attorney's fees and costs; and if not, were the amounts awarded proper.For the reasons which follow, we affirm summary judgment against Shanwick and reverse summary judgment against Darlene Shannon.Additionally, we affirm the trial court's basis for attorney's fees, but remand for re-examination of the amount of fees and costs in light of our decision.

Background

On appeal from a motion from summary judgment we view the facts, and all reasonable inferences, in the light most favorable to the appellant.State ex rel. Corbin v. Challenge, Inc., 151 Ariz. 20, 24, 725 P.2d 727, 731(App.1986).As noted by the appellants, there is no real dispute concerning the underlying facts.

On May 6, 1988, the Morrisons agreed to loan $25,000 to Shanwick.This agreement was reduced to writing and provided that Shanwick would repay the $25,000 loan plus $2,500 in 60 days.The agreement was signed by Johnny Shannon, appellantDarlene Shannon's husband, both as Chief Executive Office of Shanwick and personally.

Shanwick received the $25,000.On July 6, 1988, the Morrisons agreed to an extension on the loan for 60 additional days.This agreement was reduced to writing which was signed by Johnny Shannon both as C.E.O. of Shanwick and personally.Attached to the agreement was a check for $27,500 (the $25,000 principal and an additional $2,500) written on Shanwick's account and postdated to September 6, 1988.

At this same time the Morrisons were to receive an additional $2,500 as evidenced by a check written on Shanwick's account and postdated to July 12, 1988.This payment was in consideration of the original loan term of May 6, 1988, through July 6, 1988.

Both of the checks were returned for insufficient funds and payment was not made.After several demands, the Morrisons filed suit claiming breach of contract and statutory relief under A.R.S. § 12-671, the "bad check"statute.The trial court granted summary judgment against Shanwick and Darlene Shannon on the first count and against Shanwick on the second count.

Discussion

We initially note that summary judgment is improper unless there are no disputes concerning material issues of fact and one of the parties is entitled to judgment as a matter of law.Rule 56(c),Arizona Rules of Civil Procedure;Nicoletti v. Westcor, Inc., 131 Ariz. 140, 142, 639 P.2d 330, 332(1982).

Summary Judgment Against Darlene Shannon

Appellants argue that summary judgment against Darlene Shannon was improper as the judgment was entered against her without notice and an opportunity to be heard.By way of supplemental authority attached to their opening brief, appellants assert that the Morrisons failed to follow the procedure described in Rule 56(a) for filing motions for summary judgment.

To better understand our conclusion we set forth the procedural history in detail.The Morrisons filed their complaint on November 23, 1988.The complaint named Shanwick, an Arizona corporation, and Johnny and "Jane Doe" Shannon, husband and wife, as defendants.Service was completed on Shanwick on November 29, 1988.On December 2, 1988, service was attempted on Johnny Shannon by leaving a copy of the complaint and summons at his office.²Shanwick separately answered on December 28, 1988.

The Morrisons filed a motion for summary judgment on January 31, 1989.The allegations and prayer were directed solely against Shanwick.Copies of the motion were mailed to Lance F. Jacobs, as attorney for defendant Shanwick, and to Johnny Shannon at the Shanwick corporate office address.Nine days later on February 9, 1989, a copy of the complaint and summons was served on Darlene Shannon at her home.

On February 21, 1989, Shanwick filed its response to the motion for summary judgment and a cross motion for summary judgment.This motion was signed by Jacobs as attorney for Shanwick.The Morrisons filed a reply and sent copies to Johnny Shannon at the Shanwick office address and to Jacobs as attorney for Shanwick.

On March 9, 1989, the trial court issued a minute entry reflecting its decision to grant the Morrisons summary judgment against both Shanwick and Darlene Shannon.

On March 23, 1989, Darlene Shannon filed her separate answer after an application for default was filed.Jacobs signed this pleading as attorney for Darlene Shannon.On April 5, 1989, Darlene Shannon filed an objection to the entry and form of judgment, specifically arguing the impropriety of the procedures utilized.After several other motions, judgment was formally entered on May 5, 1989.

By filing their motion for summary judgment nine days before serving Darlene Shannon with process, the Morrisons failed to follow the filing procedure described in Rule 56(a)³ with respect to Ms. Shannon.Normally this procedural defect alone, without any discussion of notice or opportunity to be heard, would preclude summary judgment in the Morrisons' favor.SeeLocal Union No. 490, United Rubber, Cork, Linoleum and Plastic Workers of America, AFL-CIO v. Kirkhill Rubber Co., 367 F.2d 956, 958(9th Cir.1966)(holding that summary judgment was improper where plaintiff filed motion for summary judgment before the expiration of twenty days);see alsoFeldman v. Local Bd. No. 22 of the Selective Service System, 239 F.Supp. 102, 103(S.D.N.Y.1964)(stating in dicta that motion for summary judgment filed on same day of complaint violates Rule 56(a)).However, appellants did not raise this defect to the trial court, and first argued it on appeal in a supplemental authority filed after all the briefing was completed.Because the argument was not timely raised, we cannot grant relief on this basis.SeeContempo Const. Co. v. Mountain States Tel. & Tel. Co., 153 Ariz. 279, 282, 736 P.2d 13, 16(App.1987)(appellate court will not consider new issues or theories raised by parties on appeal from summary judgment);see alsoHerring v. Railway Exp. Agency, Inc., 13 Ariz.App. 28, 30, 474 P.2d 35, 37(1970)(objection waived where party failed to timely object to violation of ten day notice provision under the former Rule 56(c)).

We are left then to decide whether the described procedure resulted in a denial of due process.The Arizona and federal constitutions prohibit deprivation of property without due process.Ariz. Const. art. 2 § 4;U.S. Const. Amend. XIV.Among other important considerations, due process assures us that property will not be taken under the auspices of the government absent notice and an opportunity to be heard.Landgraff v. Wagner, 26 Ariz.App. 49, 54, 546 P.2d 26, 31(1976), appeal dismissed, 429 U.S. 806, 97 S.Ct. 40, 50 L.Ed.2d 67(1976).Notice and an opportunity to be heard must be provided at a meaningful time and in a meaningful manner, Huck v. Haralambie, 122 Ariz. 63, 65, 593 P.2d 286, 288(1979), as provided by the regular and established rules of procedure, Marco v. Superior Court, 17 Ariz.App. 210, 212, 496 P.2d 636, 638(1972).

We do not believe Darlene Shannon was afforded notice and an opportunity to be heard at a meaningful time or in a meaningful manner as provided by established rules of procedure.The record is clear that Darlene Shannon was not served with a complaint and summons until nine days after the motion for summary judgment was filed.Additionally, she was never provided or served with a copy of the motion.⁴The record only shows that the Morrisons mailed a copy of their motion to Jacobs as the attorney for Shanwick and that another copy of the motion was mailed to Johnny Shannon at the Shanwick office address.The mailing of these copies also occurred prior to service on Darlene Shannon.

The Morrisons argue that Darlene Shannon had adequate notice of the motion because her attorney knew of it.This position is based on either of two implicit presumptions, both of which are flawed.If the Morrisons contend that the initial mailing of the motion to Jacobs as attorney for Shanwick also constituted notice to Darlene Shannon, we cannot agree.The only copy of the motion mailed to Jacobs was addressed to him by the Morrisons as attorney for Shanwick before Darlene Shannon was brought into the action.There are no facts demonstrating that Jacobs was Ms. Shannon's attorney of record in this matter when the motion was mailed.We will not assume from the bare fact that Jacobs was ultimately Ms. Shannon's attorney of record, that he was her attorney before she was even made a proper party to the action.⁵SeeRotary Club of Tucson v. Chaprales Ramos de Pena, 160 Ariz. 362, 365, 773 P.2d 467, 470(App.1989)(courts may not assume party's attorney is proper agent for service of process; evidence must show attorney is authorized to receive such service).

The Morrisons' other postulate is that the motion itself served to notify Ms. Shannon, through her attorney, as soon as...