Panzino v. City of Phoenix

• Decision Date: 10 May 2000
• Docket Number: No. CV-99-0193-PR.,CV-99-0193-PR.
• Parties: Laura J. PANZINO, Plaintiff-Appellee, v. CITY OF PHOENIX, Defendant-Appellant. Laura J. Panzino, a single woman, Plaintiff-Appellant, v. City of Phoenix, a municipal corporation, and Denise Katherine Karlin and John Doe Karlin, wife and husband, Defendants-Appellees.
• Court: Arizona Supreme Court

999 P.2d 198

196 Ariz. 442

Laura J. PANZINO, Plaintiff-Appellee, v. CITY OF PHOENIX, Defendant-Appellant.

Laura J. Panzino, a single woman, Plaintiff-Appellant, v. City of Phoenix, a municipal corporation, and Denise Katherine Karlin and John Doe Karlin, wife and husband, Defendants-Appellees.

No. CV-99-0193-PR.

Supreme Court of Arizona, En Banc.

May 10, 2000.

Jones, Skelton & Hochuli by David C. Lewis, Phoenix, Attorneys for the City of Phoenix.

City of Phoenix by Stephen J. Craig, Phoenix, Attorneys for the City of Phoenix.

Jones, Skelton & Hochuli by Ronald W. Collett and Eileen J. Dennis, Phoenix, Attorneys for the Karlins.

Robert F. Clarke, P.C. by Robert F. Clarke and Sonja M. Yurkiw, Phoenix, Attorneys for Panzino.

Bury, Moeller, Humphrey & O'Meara, P.C. by Andrew J. Petersen, Tucson, Attorneys for Amicus Curiae Arizona Association of Defense Counsel.

OPINION

McGREGOR, Justice.

¶ 1 The issue presented is whether Arizona should adopt the positive misconduct rule, which permits a client whose attorney has abandoned him or her to obtain relief from a judgment by invoking Rule 60(c)(6) of the Arizona Rules of Civil Procedure. We decline to adopt the rule because doing so would require us to abandon our long-standing interpretation of Rule 60(c) and to overturn established principles of law.

I.

¶ 2 On January 18, 1993, a car driven by Denise Karlin struck Laura Panzino as she walked in a street to avoid rainwater ponding in her path. Panzino, seriously injured, retained attorney David Appleton to represent her. Appleton eventually filed two identical personal injury actions against the same defendants, neither of which he timely pursued. On the motion of defendants, the trial court dismissed both actions.

¶ 3 Panzino then retained new counsel, who moved for relief under Rule 60(c)(6), Arizona Rules of Civil Procedure. The trial court, relying upon the positive misconduct rule, granted relief in one action and denied relief in the other. The court of appeals, also adopting the positive misconduct rule, held that Rule 60(c)(6) provided Panzino relief in both actions. The court concluded that Appleton's omissions and actions in representing Panzino demonstrated "longstanding and pervasive neglect" and constituted complete and total abandonment of his client. See Panzino v. City of Phoenix, 195 Ariz. 453, 459, 990 P.2d 654, 660 (1999)

. Although Appleton disputes that characterization, we assume for purposes of this opinion that Appleton's actions comprised longstanding and pervasive neglect, that he completely abandoned his client, and that Panzino was relatively free from negligence.

¶ 4 We granted review to decide whether Arizona should adopt the positive misconduct rule. We exercise jurisdiction pursuant to article VI, section 5.3 of the Arizona Constitution, Rule 23 of the Arizona Rules of Civil Appellate Procedure, and Arizona Revised Statutes Annotated (A.R.S.) section 12-120.24.

II.

¶ 5 Rule 60(c) of the Arizona Rules of Civil Procedure allows a trial court to grant relief from judgment for the following reasons:

(1) mistake, inadvertence, surprise or excusable neglect; (2) newly discovered evidence which by due diligence could not have been discovered in time to move for a new trial under Rule 59(d); (3) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged, or a prior judgment on which it is based has been reversed or otherwise vacated, or it is no longer equitable that the judgment should have prospective application; or (6) any other reason justifying relief from the operation of the judgment.

ARIZ. R. CIV. P. 60(c).¹ This rule "`is primarily intended to allow relief from judgments that, although perhaps legally faultless, are unjust because of extraordinary circumstances that cannot be remedied by legal review.'" Hyman v. Arden-Mayfair, Inc., 150 Ariz. 444, 447, 724 P.2d 63, 66 (1986) (quoting Tippit v. Lahr, 132 Ariz. 406, 408-09, 646 P.2d 291, 293-94 (1982)). Thus, "[t]he purpose of the rule is to provide relief for those mistakes and errors which inevitably occur despite diligent efforts to comply with the rules." City of Phoenix v. Geyler, 144 Ariz. 323, 332, 697 P.2d 1073, 1082 (1985).

¶ 6 To obtain relief under Rule 60(c)(6), the subsection on which Panzino relies, a party must make two showings. "`First, the reason for setting aside the [judgment or order] must not be one of the reasons set forth in the five preceding clauses.... Second, the "other reason" advanced must be one that justifies relief.'" Bickerstaff v. Denny's Restaurant, Inc., 141 Ariz. 629, 632, 688 P.2d 637, 640 (1984) (quoting Webb v. Erickson, 134 Ariz. 182, 186, 655 P.2d 6, 10 (1982) (citations omitted) (emphasis in original)). Furthermore, the subsection applies only when our systemic commitment to finality of judgments is outweighed by "`extraordinary circumstances of hardship or injustice.'" Id. (quoting Webb, 134 Ariz. at 187, 655 P.2d at 11).²

¶ 7 In general, a party can obtain Rule 60(c)(6) relief from a judgment entered due to his or her attorney's failure to act only if that failure is legally excusable. See id. at 633, 688 P.2d at 641; see also ARIZ. R. CIV. P. 60(c)(1). In contrasting cases of inexcusable neglect, the client cannot obtain relief because "the client is charged with the actions and omissions of its attorney." Mission Ins. Co. v. Cash, Sullivan & Cross, 170 Ariz. 105, 108, 822 P.2d 1, 4 (1991); see also Carroll v. Abbott Lab. Inc., 32 Cal.3d 892, 187 Cal.Rptr. 592, 654 P.2d 775, 775 (1982)

("[A]s a general rule an attorney's inexcusable neglect is chargeable to the client.").

¶ 8 To permit relief from judgment when an attorney's conduct is so egregious as to constitute abandonment of a client, a small number of courts adopted the "positive misconduct rule." The rule, which apparently had its genesis in Daley v. County of Butte, 227 Cal.App.2d 380, 38 Cal.Rptr. 693, 700 (1964), describes an exception to the rule that an attorney's actions bind his client:

"[E]xcepted from the rule are those instances where the attorney's neglect is of that extreme degree amounting to positive misconduct, and the person seeking relief is relatively free from negligence.... The exception is premised upon the concept [that] the attorney's conduct, in effect, obliterates the existence of the attorney-client relationship, and for this reason his negligence should not be imputed to the client."

Carroll, 187 Cal.Rptr. 592,654 P.2d at 778 (citations omitted) (quoting Buckert v. Briggs, 15 Cal.App.3d 296, 93 Cal.Rptr. 61, 64 (1971)); see also Thomas N. Thrasher and Gary T. Blate, Positive Misconduct: Excusing an Attorney's Inexcusable Neglect, 15 W. ST. U.L. REV. 667 (1988).³ A few federal courts also have sparingly applied the exception. See, e.g., Boughner v. Secretary of Health, Educ. and Welfare, 572 F.2d 976, 977 (3d Cir.1978)

(granting relief because the attorney's "egregious conduct amounted to nothing short of leaving his clients unrepresented"); United States v. Cirami, 563 F.2d 26, 34 (2d Cir.1977) (granting relief because the attorney's failure to act was caused by "a mental disorder which induced him to both neglect his duties and to assure his client that he was attending to them"). By and large, however, this exception has found little favor outside California.

¶ 9 Even those jurisdictions that recognize the rule have construed it narrowly. For instance, the California Supreme Court concluded that the positive misconduct rule "should be narrowly applied, lest negligent attorneys find that the simplest way to gain the twin goals of rescuing clients from defaults and themselves from malpractice liability, is to rise to ever greater heights of incompetence and professional irresponsibility while, nonetheless, maintaining a beatific attorney-client relationship." Carroll, 187 Cal.Rptr. 592, 654 P.2d at 779.

¶ 10 With this background, we turn to the reasons we reject Panzino's arguments urging us to adopt the positive misconduct rule in Arizona.

III.

A.

¶ 11 Adopting the positive misconduct rule would require that we abandon our traditional understanding of the relationship between subsections one through five and subsection six of Rule 60(c). We cannot consistently hold that although Rule 60(c)(1) allows relief for judgment only for excusable neglect, Rule 60(c)(6) allows relief from inexcusable neglect in the form of abandonment.

¶ 12 Rule 60(c)(6) provides an equitable catch-all that authorizes a trial court to set aside a final judgment for "any other reason justifying relief" beyond the specific reasons listed in clauses one through five. See also Gorman v. City of Phoenix, 152 Ariz. 179, 181-82, 731 P.2d 74, 76-77 (1987)

; Bickerstaff, 141 Ariz. at 632,

688 P.2d at 640. We have long held, however, that "the reason for setting aside the [judgment or order] must not be one of the reasons set forth in the five preceding clauses." Webb, 134 Ariz. at 186,

655 P.2d at 10. Because Panzino cannot attribute excusable neglect to her former lawyer, we could grant the relief she seeks only by overturning those decisions that hold subsections one through five are mutually exclusive from subsection six.

¶ 13 Moreover, adopting the positive misconduct rule would result in the irrational holding that Rule 60(c) applies to actions in which attorneys engaged in excusable neglect or to actions in which attorneys completely abandoned their clients, but not to actions involving attorney activities that fall between those two extremes. In United States v. 7108 West Grand Avenue, 15 F.3d 632, 634 (7th Cir.1994), the court rejected the same argument made here, explaining:

We know how to treat both ends of the continuum: negligence and willful misconduct alike are attributed to the litigant. When the polar cases are treated identically, intermediate ca

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