McKirahan V. Advanced 09 0589 CV090589

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NOTICE: THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND MAY NOT BE CITED
EXCEPT AS AUTHORIZED BY APPLICABLE RULES.
See Ariz. R. Supreme Court 111(c); ARCAP 28(c);
Ariz. R. Crim. P. 31.24
IN THE COURT OF APPEALS
STATE OF ARIZONA
DIVISION ONE
PAUL W. MCKIRAHAN, a single man, ) 1 CA-CV 09-0589
)
) DEPARTMENT B
Plaintiff/Appellant, )
) MEMORANDUM DECISION
v. ) (Not for Publication –
) Rule 28, Arizona Rules of
ADVANCED PROPERTY TAX LIENS, INC.,) Civil Appellate Procedure)
an Arizona corporation, )
)
)
Defendant/Appellee. )
__________________________________)
Appeal from the Superior Court in Maricopa County
Cause No. CV 2009-014061
The Honorable Robert H. Oberbillig, Judge
REVERSED; REMANDED WITH INSTRUCTIONS
The Sorenson Law Firm LLC Tempe
By Kenneth J. Willmott
and James D. Nolan
Attorneys for Plaintiff/Appellant
Eric W. Kessler Mesa
Attorney for Defendant/Appellee
N O R R I S, Judge
¶1 The superior court dismissed plaintiff/appellant Paul
W. McKirahan’s complaint concluding it was an impermissible
DIVISION ONE
FILED:
PHILIP G. URRY,CLERK
BY:
07-08-2010
DN
2
collateral attack on a default judgment entered in a prior tax
lien foreclosure case. Because McKirahan asserted in his
complaint the lien foreclosure judgment was void for lack of
personal jurisdiction, the superior court should not have
dismissed it. We thus reverse and remand for further
proceedings.
FACTS AND PROCEDURAL BACKGROUND
¶2 In June 2009, McKirahan sued defendant/appellee
Advanced Property Tax Liens, Inc. (“APTL”) to quiet title to
certain real property and obtain reimbursement of attorneys’
fees and costs, pursuant to Arizona Revised Statutes (“A.R.S.”)
section 12-1103(B) (2003).1
1In reviewing the complaint’s dismissal, we assume all
properly pleaded matters therein are true. Schwamm v. Superior
Court, 4 Ariz. App. 480, 481, 421 P.2d 913, 914 (1966) (applying
the standard and affirming the denial of a motion to dismiss an
action used to attack a judgment rendered without personal
jurisdiction).
According to his complaint,
Augustina T. Artates originally held title to the property and
on or about October 3, 2002, sold the property to another person
who, in turn, sold the property to McKirahan, as evidenced by a
quit claim deed recorded in the Maricopa County Recorder’s
Office on September 16, 2004. McKirahan further alleged that on
July 16, 2008, APTL had filed suit in Maricopa County Superior
Court (No. CV 2008-091928) to foreclose a tax lien it claimed to
have purchased on the property but neither named nor served him
3
as a defendant. Because of these deficiencies, McKirahan
alleged the court did not have personal jurisdiction over him
and, accordingly, did not have jurisdiction to enter an October
6, 2008 default judgment against him and in APTL’s favor
foreclosing the tax lien (the “lien foreclosure judgment”).2
¶3 APTL moved to dismiss McKirahan’s complaint under
Arizona Rule of Civil Procedure 12(b), asserting, in part, it
was an impermissible collateral attack on the lien foreclosure
judgment. The superior court agreed. This appeal followed.
As
relief, McKirahan sought (1) a declaration he was the rightful
owner of the property, (2) an order compelling APTL to transfer
legal title and possession of the property to him, (3) a
judgment enjoining APTL from claiming any interest in the
property, (4) an award of attorneys’ fees and costs, and (5)
“such other and further relief” as proper.
2McKirahan alleged:
Failure to inform Plaintiff, Paul W.
McKirahan, that he was being served as a
defendant in the foreclosure action under a
fictitious name prevented the court in the
foreclosure action from having personal
jurisdiction over Plaintiff. Consequently,
the court did not have jurisdiction to enter
a default judgment against Plaintiff in the
tax lien foreclosure action.
4
DISCUSSION
¶4 On appeal, McKirahan argues that because he was
asserting the lien foreclosure judgment was void for lack of
personal jurisdiction, he was entitled to file an independent
action to set aside the lien foreclosure judgment under Rule
60(c), and therefore, the superior court should not have
dismissed his complaint.3
¶5 Rule 60(c) provides:
We agree.
On motion and upon such terms as are just
the court may relieve a party or a party’s
legal representative from a final judgment,
order or proceeding for the following
reasons: . . . (4) the judgment is void;
. . . . This rule does not limit the power
of a court to entertain an independent
action to relieve a party from a judgment,
order or proceeding, or to grant relief to a
defendant served by publication as provided
by Rule 59(j) or to set aside a judgment for
fraud upon the court. The procedure for
obtaining any relief from a judgment shall
be by motion as prescribed in these rules or
by an independent action.
3We review de novo the superior court’s interpretation
of procedural rules. In re Marriage of Reeder v. Johnson, 224
Ariz. 85, ___, ¶ 6, 227 P.3d 492, 494 (App. 2010). Accordingly,
we disagree with APTL the standard of review is for an abuse of
discretion. APTL’s reliance on Gen. Elec. Capital Corp. v.
Osterkamp, 172 Ariz. 191, 836 P.2d 404 (App. 1991), is
misplaced. The issue in Osterkamp was whether the superior
court abused its discretion in refusing to vacate a default
judgment for either excusable neglect or insufficient service of
process, see id. at 193, 836 P.2d at 406; in contrast, the issue
here is whether Rule 60(c) authorized McKirahan to bring an
independent action to set aside the lien foreclosure judgment.
That issue requires us to interpret Rule 60(c) and thus presents
an issue for de novo review.
5
(Emphasis added.)
¶6 On its face, the rule authorized McKirahan to bring an
“independent action” to vacate the lien foreclosure judgment
because he was contending the judgment was void for lack of
personal service.4
4If the defendant appears and contests jurisdiction and
then loses, the court’s jurisdiction cannot subsequently be
questioned. Lofts v. Superior Court, 140 Ariz. 407, 410, 682
P.2d 412, 415 (1984). The key issue is not whether McKirahan
was in fact properly served, but whether he appeared and
litigated the jurisdiction issue or other issues in the prior
action. See Master Fin., Inc. v. Woodburn, 208 Ariz. 70, 74,
¶ 19, 90 P.3d 1236, 1240 (App. 2004) (“[A] party seeking relief
from a void judgment need not show that their failure to file a
timely answer was excusable, that they acted promptly in seeking
relief from the default judgment, or that they had a meritorious
defense.”). Because the lien foreclosure judgment was entered
by default, McKirahan is entitled to raise the jurisdictional
issue in this separate action. See id.; see also Schwamm, 4
Ariz. App. at 483, 421 P.2d at 916 (action for declaratory
judgment may be used to attack a judgment as void for lack of
jurisdiction).
See generally Walker v. Davies, 113 Ariz.
233, 235, 550 P.2d 230, 232 (1976) (judgment is not void unless
superior court lacked jurisdiction over the subject matter, the
parties, or to render the particular judgment); Master Fin., 208
Ariz. at 74, ¶ 19, 90 P.3d at 1240 (judgment is void if court
lacked jurisdiction over the subject matter, a person, or the
particular order or judgment entered); see also Am. Sur. Co. v.
Mosher, 48 Ariz. 552, 558, 64 P.2d 1025, 1028 (1936) (party may
obtain relief from judgment either by motion to vacate the
judgment or by an independent action to have it set aside);
6
Daniel J. McAuliffe & Shirley J. Wahl, 2A Arizona Practice:
Civil Trial Practice § 29.2, at 199 (2d ed. 2001) (judgment is
void on its face when the court lacked jurisdiction over the
defendant).
¶7 Further, even if McKirahan’s complaint constituted a
collateral attack on the lien foreclosure judgment because it
requested additional relief, as APTL argued in the superior
court and argues here,5
¶8 Here, although McKirahan’s complaint asserted other
issues and sought other relief, because it alleged the lien
foreclosure judgment was void, whether McKirahan was
collaterally attacking that judgment was immaterial. The
a void judgment may, nevertheless, be
collaterally attacked. E.g., Walker, 113 Ariz. at 235, 550 P.2d
at 232 (judgment may not be attacked collaterally even for fraud
unless it is void on its face); Cooper v. Commonwealth Title of
Ariz., 15 Ariz. App. 560, 564, 489 P.2d 1262, 1266 (1971)
(judgment which is void on its face may be attacked at any time,
collaterally or otherwise); Dockery, 45 Ariz. at 446-49, 45 P.2d
at 660-62.
5When “an action has for its primary purpose the
obtaining of independent relief, and the vacating or setting
aside of a judgment is merely incidental thereto, such action is
not a direct, but a collateral, attack upon the judgment.”
Dockery v. Cent. Ariz. Light & Power Co., 45 Ariz. 434, 445, 45
P.2d 656, 660 (1935); accord Cox v. Mackenzie, 70 Ariz. 308,
312, 219 P.2d 1048, 1051 (1950) (collateral attack on judgment
is “an effort to obtain another and independent judgment which
will destroy the effect of the former judgment”).
7
superior court did not need to decide whether McKirahan’s
complaint constituted a collateral attack on the lien
foreclosure judgment, and thus, should not have dismissed his
complaint on that basis.6
¶9 APTL argues, nevertheless, A.R.S. § 42-18204(B) (Supp.
2009) limited McKirahan’s ability to seek relief under Rule
60(c) from a tax lien foreclosure judgment.
7
After entering judgment the parties whose
rights to redeem the tax lien are thereby
foreclosed have no further legal or
equitable right, title or interest in the
property subject to the right of appeal and
stay of execution as in other civil actions.
The statute
provides:
Id.
¶10 Section 42-18204(B) does not replace the Arizona Rules
of Civil Procedure; in fact, the legislature made the tax lien
foreclosure statutes subject to the “provisions of law relating
to civil actions” and specified the “rules of civil procedure
6APTL’s reliance on Jacobs v. Jacobs, 3 Ariz. App. 436,
415 P.2d 151 (1966), is misplaced. In that case, the court held
the plaintiffs could not, in a new action, attack a prior
judgment quieting title to property in favor of the defendants.
Unlike the facts here, the Jacobs plaintiffs made no assertion
the prior judgment was void and indeed, never moved to have it
set aside. Accordingly, the court concluded the judgment could
not be collaterally attacked. Id. at 439-40, 415 P.2d at 153-
54.
7We review de novo the interpretation of statutes.
Dreamland Villa Cmty. Club, Inc. v. Raimey, 224 Ariz. 24, ___,
¶ 17, 226 P.3d 411, 416 (App. 2010).
8
control the proceedings in an action to foreclose the right to
redeem.” A.R.S. § 42-18203(A) (2006); see also Lewis v. Palmer,
67 Ariz. 189, 194, 193 P.2d 456, 459 (1948) (tax lien
foreclosure action is civil action and under predecessor of
A.R.S. § 42-18201, subject to “the broad powers of the Superior
Court, and hence governed by its general rules”).8
¶11 Moreover, Roberts v. Robert, 215 Ariz. 176, 158 P.3d
899 (App. 2007), undercuts APTL’s argument the tax lien statutes
limit the operation of Rule 60(c). In Roberts, we recognized a
party entitled to redeem a tax lien could move to set aside a
default lien foreclosure judgment because it was void for lack
of personal jurisdiction. 215 Ariz. at 180, ¶ 17, 158 P.3d at
903.
8In Lewis, the plaintiff sued to quiet title to
property, asserting a prior judgment foreclosing a tax lien was
invalid because his property had been improperly taxed. Our
supreme court held the plaintiff could not attack the
foreclosure judgment because the superior court in that action
had subject matter jurisdiction, jurisdiction over the plaintiff
(who had been personally served), and jurisdiction to render the
foreclosure judgment. 67 Ariz. at 195, 193 P.2d at 459-60. In
so holding, the court explained the plaintiff’s objection to the
validity of the foreclosure judgment should have been raised in
that action and because he had failed to do so, the “judgment in
that cause, over which the court unquestionably had
jurisdiction” had become final and could not be collaterally
attacked. Id. at 195, 193 P.2d at 460. Lewis is
distinguishable from this case, as here, McKirahan is asserting
the lien foreclosure judgment is void for lack of personal
jurisdiction, and as discussed above, he may collaterally attack
it.
9
¶12 APTL further contends McKirahan was not entitled to
challenge the lien foreclosure judgment because he should have
challenged APTL’s efforts to foreclose the tax lien before the
lien foreclosure judgment was entered and his rights foreclosed.
Even after entry of a judgment foreclosing a tax lien, however,
parties with the right to redeem may collaterally attack the
judgment based upon lack of jurisdiction. Sprang v. Petersen
Lumber, Inc., 165 Ariz. 257, 262, 798 P.2d 395, 400 (App. 1990)
(lien foreclosure judgment void; treasurer’s deed to tax
purchaser based on void judgment conveyed nothing).9
¶13 Finally, APTL’s answering brief raises several factual
and legal issues that have yet to be addressed in the superior
court. These issues include whether McKirahan acquired record
title, whether he was personally served, the validity of the
lien foreclosure judgment, and service procedures for
fictitiously named defendants. Because the superior court has
not yet addressed these issues, we decline to do so.
9APTL’s answering brief appears to suggest McKirahan is
collaterally estopped from challenging the lien foreclosure
judgment as being void for lack of personal jurisdiction.
Collateral estoppel, known as issue preclusion, is only
applicable when the issue or fact in dispute was actually
litigated in the prior litigation. E.g., Chaney Bldg. Co. v.
City of Tucson, 148 Ariz. 571, 573, 716 P.2d 28, 30 (1986).
When, as here, judgment in the prior litigation was entered by
default, no issue or fact was actually litigated, the default
judgment cannot have collateral estoppel effect. State ex rel.
Dep’t of Econ. Sec. v. Powers, 184 Ariz. 235, 237-38, 908 P.2d
49, 51-52 (App. 1995) (no collateral estoppel when paternity not
actually litigated in default marriage dissolution action).
10
CONCLUSION
¶14 We reverse the dismissal of McKirahan’s independent
action and remand for further proceedings consistent with this
decision. On remand, the superior court must determine whether
the court entering the lien foreclosure judgment had personal
jurisdiction over McKirahan.
/s/
__________________________________
PATRICIA K. NORRIS, Judge
CONCURRING:
/s/
________________________________
JOHN C. GEMMILL, Presiding Judge
/s/
________________________________
MAURICE PORTLEY, Judge

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