Rogone v. Correia

• Decision Date: 25 September 2014
• Docket Number: No. 1 CA–CV 13–0375.,1 CA–CV 13–0375.
• Citation: Rogone v. Correia, 236 Ariz. 43, 335 P.3d 1122, 696 Ariz. Adv. Rep. 18 (Ariz. App. 2014)
• Parties: John ROGONE aka Johnny Rogone, now Bingo Bada Bing; and Jason Rogone, individually and as Successor Co–Trustees of The Alfred Correia and Mary F. Correia Trust, Plaintiffs/Appellees/Cross–Appellants, v. Rosira CORREIA aka Rosira A. Correia aka Rosira Shaw aka Rosira A. Henderson aka Rosira Sasser aka Rosira A. Correia Sasser aka Rose Sasser; John K. Sasser aka John Kershner Sasser, individually and as Trustee of the John K. Sasser Estate Trust, dated 9/18/1996; Rosira A. Correia Sasser, Trustee of The Correia Estate Trust, dated 10/31/2003; E Bronco Trail Rental LLC; Hot Springs Holdings LLP, Defendants/Appellants/Cross–Appellees, Aiken Schenk Hawkins & Ricciardi P.C.; John J. Hebert, Cross–Appellees.
• Court: Arizona Court of Appeals

236 Ariz. 43

335 P.3d 1122

696 Ariz. Adv. Rep. 18

John ROGONE aka Johnny Rogone, now Bingo Bada Bing; and Jason Rogone, individually and as Successor Co–Trustees of The Alfred Correia and Mary F. Correia Trust, Plaintiffs/Appellees/Cross–Appellants

v. Rosira CORREIA aka Rosira A. Correia aka Rosira Shaw aka Rosira A. Henderson aka Rosira Sasser aka Rosira A. Correia Sasser aka Rose Sasser; John K. Sasser aka John Kershner Sasser, individually and as Trustee of the John K. Sasser Estate Trust, dated 9/18/1996; Rosira A. Correia Sasser, Trustee of The Correia Estate Trust, dated 10/31/2003; E Bronco Trail Rental LLC; Hot Springs Holdings LLP, Defendants/Appellants/Cross–AppelleesAiken Schenk Hawkins & Ricciardi P.C.; John J. Hebert, Cross–Appellees.

No. 1 CA–CV 13–0375.

Court of Appeals of Arizona, Division 1.

Sept. 25, 2014.

Henman Law Firm, P.C., Phoenix By G. Lee Henman, Jr., Counsel for Plaintiffs/Appellees/Cross–Appellants.

Jaburg & Wilk, P.C., Phoenix By Kathi Mann Sandweiss, Roger L. Cohen, Counsel for Defendants/Appellants/Cross–Appellees.

Aiken Schenk Hawkins & Ricciardi P.C., Phoenix By Alfred W. Ricciardi, Robert C. Van Voorhees, Counsel for Cross–Appellee Aiken Schenk Hawkins & Ricciardi P.C.

Judge PETER B. SWANN delivered the opinion of the Court, in which Presiding Judge ANDREW W. GOULD and Judge JON W. THOMPSON joined.

OPINION

SWANN, Judge.

¶ 1 Rosira Correia Sasser (“Rose”) and John K. Sasser (“John”), individually and as the respective trustees of the Correia Estate Trust and the John K. Sasser Estate Trust, together with E Bronco Trail Rental LLC and Hot Springs Holdings LLP (collectively, “the Sassers”), appeal a ruling of the trial court that relied on equitable grounds to deny Rose's assertion of the homestead exemption. Johnny and Jason Rogone (collectively, “the Rogones”), individually and as successor co-trustees of the Alfredo Correia and Mary F. Correia Trust, cross-appeal the court's vacating of a second amended judgment against the Sassers. Both the Sassers and the Rogones appeal the court's order of attorney's fees, and the Sassers further appeal the court's denial of their motion for a new trial on attorney's fees. We affirm the ruling vacating the second amended judgment, affirm the order of attorney's fees, and affirm the denial of a new trial on attorney's fees. We reverse the ruling denying Rose's assertion of the homestead exemption, and hold that equitable considerations cannot defeat the applicability of the exemption.

FACTS AND PROCEDURAL HISTORY

¶ 2 In 2004, the Rogones filed suit in California against Rose as then-trustee of the Alfredo Correia and Mary F. Correia Trust. While the California lawsuit was pending, Rose and John completed three property transactions with varying degrees of assistance from an attorney with the law firm now known as Aiken Schenk Hawkins & Ricciardi P.C. (“Aiken Schenk”). First, they transferred property owned as tenants by the entirety and located in Arkansas (“the Hot Springs Property”) to John as trustee of the John K. Sasser Estate Trust, forming Hot Springs Holdings LLP in the process. Second, Rose transferred property located in Arizona (“the E. Bronco Trail Property”) from the Correia Estate Trust to the newly formed E Bronco Trail Rental LLC, with John as its manager and Hot Springs Holdings LLP as its sole member. Third, Rose and John entered into a postnuptial agreement by which each waived any interest in assets identified as belonging to the other or thereafter acquired by the other.

¶ 3 The Rogones eventually prevailed against Rose in the California lawsuit, registered the judgment in Arizona and sued the Sassers in Arizona to facilitate enforcement of the California judgment. The Arizona lawsuit sought to set aside the above-referenced transactions, alleging that the Sassers had executed them with the intent to hinder, delay and defraud the Rogones in their attempt to collect on the California judgment. The case proceeded to trial at which a different attorney from Aiken Schenk represented the Sassers.

¶ 4 The court agreed with an advisory jury's findings that the Sassers executed all three property transactions with actual intent to delay, hinder or defraud the Rogones. The court set aside the transfer of the E. Bronco Trail Property, ordering Rose to sell it and apply the proceeds to the judgments. The court further ordered John to convey Rose's one-half interest in the Hot Springs Property to the Rogones for them to sell and likewise credit the judgments. The court also set aside Rose and John's postnuptial agreement. The first amended judgment clarified that only the sale proceeds “in excess of any valid statutory homestead” were to be applied to the judgments.

¶ 5 The Rogones sought attorney's fees against the Sassers and Aiken Schenk, jointly and severally. For reasons explained below, the court granted the fee request against the Sassers but not their counsel.

¶ 6 Soon after the court entered judgment in the Arizona lawsuit, Rose moved into the E. Bronco Trail Property and claimed it was thereby exempt from collection as her homestead. Having considered the parties' additional briefing on the topic, the court found that allowing Rose to assert the homestead exemption in the E. Bronco Trail Property would be inequitable, assuming without deciding that she otherwise qualified for the exemption.

¶ 7 The Sassers retained new counsel and moved for a new trial, which the court denied. They also moved to amend the first amended judgment, which the court granted in part and denied in part. The second amended judgment provided that Rose and John would hold the Hot Springs Property as tenants by the entirety and were to find a practical method of sale of the E. Bronco Trail Property. However, the court later concluded that it had erred by voiding the transfer of the Hot Springs Property because the Rogones never requested such relief and because the court lacked authority to declare what interest Rose and John held in the Arkansas property.

¶ 8 The Rogones appealed from the second amended judgment and the Sassers cross-appealed. We suspended the appeal and revested jurisdiction in the trial court to allow the Sassers to move to set aside the second amended judgment based on fraud on the court. The trial court granted that motion and we in turn dismissed the pending appeal. The trial court then entered a third amended judgment, from which the Sassers now appeal and the Rogones cross-appeal.

DISCUSSION

I. THE COURT DID NOT ABUSE ITS DISCRETION BY SETTING ASIDE THE SECOND AMENDED JUDGMENT.

¶ 9 We first consider the Rogones' argument that the court abused its discretion by setting aside the second amended judgment. As an initial matter, we reject the Sassers' position that we should not address the Rogones' argument because the Arizona Supreme Court declined special action jurisdiction over the same contention. A declination of jurisdiction is not a decision on the merits that becomes law of the case. Flores v. Cooper Tire & Rubber Co., 218 Ariz. 52, 60, ¶ 41, 178 P.3d 1176, 1184 (App.2008).

¶ 10 The Rogones argue that the trial court lacked jurisdiction to address the Sassers' motion to set aside the second amended judgment because the judge who heard that motion was not the judge who entered the second amended judgment. This argument has no merit. The Sassers brought a direct attack on the second amended judgment in the same case by the means provided for in Ariz. R. Civ. P. 60(c), arguing that the judgment failed to accurately reflect the rulings of the first judge and seeking an amended judgment consistent with those rulings. Though it might have been desirable to have a single judge consider these issues, consideration of a Rule 60 motion by a newly assigned judge raises no jurisdictional concerns.See Hibbs v. Calcot, Ltd., 166 Ariz. 210, 214, 801 P.2d 445, 449 (App.1990) ; see also Peterson v. Speakman, 49 Ariz. 342, 348, 66 P.2d 1023, 1025 (1937) (“The jurisdiction of the court, no matter by which judge it is exercised, is that of the whole court, and not of one judge nor division thereof.”).

¶ 11 The Rogones also contend that the Sassers' motion was untimely because it was filed almost a year after the court entered the second amended judgment. We disagree. Under Rule 60(c)(6), the court may set aside a judgment for fraud on the court at any time “because such fraud harms the integrity of the judicial process and is a wrong against the institutions set up to protect and safeguard the public.” Cypress on Sunland Homeowners Ass'n v. Orlandini, 227 Ariz. 288, 299–300, ¶ 43, 257 P.3d 1168, 1179–80 (App.2011) (citations omitted) (internal quotation marks omitted).

¶ 12 The Rogones next argue that even if the court had jurisdiction and the motion was timely, the court erred by granting relief. We review the setting aside of a judgment under Rule 60(c) for abuse of discretion. Johnson v. Elson, 192 Ariz. 486, 488, 967 P.2d 1022, 1024 (App.1998). Under Rule 60(c)(6), the court may relieve a party from a final judgment for “any ... reason justifying relief,” provided that the movant can show extraordinary hardship or injustice for a reason other than the five specified in Rule 60(c)(1) through (5). Hilgeman v. Am. Mortg. Sec., Inc., 196 Ariz. 215, 220, 994 P.2d 1030, 1035 (App.2000). The court has broad discretion to vacate a judgment under Rule 60(c)(6) when, after considering the totality of the circumstances and the equities involved, the court determines that it is appropriate to accomplish justice. Amanti Elec., Inc. v. Engineered Structures, Inc., 229 Ariz. 430, 432, ¶¶ 7–8, 276 P.3d 499, 501 (App.2012) ; Gendron v. Skyline Bel Air Estates, 121 Ariz. 367, 368–69, 590 P.2d 483, 484–85 (App.1979).

¶ 13 Here, the court found that the second amended judgment contained “multiple, material and surreptitiously added provisions not authorized by any prior court ruling,” sufficient to constitute “other reason justifying relief” under Rule 60(c)(6). In the court...