Camacho v. Gardner

441 P.2d 249, 7 Ariz. App. 483, 1968 Ariz. App. LEXIS 424

• Court: Court of Appeals of Arizona
• Decided: May 21, 1968
• Docket: 2 CA-CIV 403
• Status: Published

Opinions

JOHN A. McGUIRE, Superior Court Judge.

The facts of this case are set forth in considerable detail in the original opinion rendered December 29, 1967 and published 6 Ariz.App. 590, 435 P.2d 719 and will not be repeated. The court’s attention was invited to certain matters not covered-in the original opinion, rehearing was ordered, and- the case resubmitted after oral argument and the filing of further memoranda. All three judges of the court adhere-to their opinions heretofore rendered insofar, as such opinions deal with the legal questions there discussed.

A further problem is presented by reason of the rights of the insurance carrier. It appears affirmatively that the insurance carrier did not know of the filing of the law suit and service of summons prior to rendition of judgment, and the insurance company then filed the motion (in the name of the insured) to set aside, exactly one week after the judgment was rendered.

In Sandoval v. Chenoweth, 102 Ariz. 241, 428 P.2d 98 (1967) the Supreme Court held that the failure on the part of the defendant to notify his insurance carrier was not a basis for denying liability. The opinion further stated that the insuraiice company filed the motion to have the judgment set aside on August 9, 1961, more than nine weeks after, being informed of t;he. suit and after garnishment proceedings were instituted against it.

The court held that the facts could not be relitigated in the garnishment proceedings and “If the insurance company can show statutory grounds to set aside the default, its remedy is to move to have the default judgment set aside, as was done in the instant case.” 102 Ariz. at 245, 428 P.2d at 102.

The judges of this court examined the original abstract of record in the Sandoval case in order to determine the precise nature of the motion filed. It is a motion filed by defendant Sandoval and commences with the words: “comes now the defendant by and through his attorneys undersigned and respectfully moves the court to set aside the judgment as to the award.” The motion and its supporting affidavit do not mention the insurance company in any way.

It therefore appears that it is not necessary for the insurance company to enter the case as an intervenor before it can file a motion to set aside a judgment against the insured. In fact, it is the duty of the insurance company to file this motion immediately on learning of the default judgme'nt and it was the delay of nine weeks in the Sandoval case which was cited by the Supreme Court as justifying a denial of the motion.

Rule 60(c) of the Rules of Civil Procedure, 16 A.R.S., pertaining to the setting side of default judgments, has been made more liberal since the date the Sandoval motion was denied by the Superior Court. It now includes the broad statement “any other reason justifying relief from the operation of the judgment.” It was held in the case of Marquez v. Rapid Harvest Co., 99 Ariz. 363, 409 P.2d 285 (1965), as well as in numerous prior cases that “any doubt which may exist should be resolved in favor of the application, to the end of securing a trial upon the merits.” 99 Ariz. at 366, 409 P.2d at 287.

It is not necessary to rule that the insurer has an absolute legal right to have default judgment set aside if its policyholder has failed to notify it of the suit. It is only necessary to hold that this is one circumstance that the trial court may consider in using its discretion.

I see no purpose in keeping this phase of the case open longer to permit the company to make a motion in its own name to set aside the judgment. While I still believe the neglect of the defendant inexcusable, I am not now prepared to hold that “any other reason justifying relief from the operation of the judgment” did not exist and that the trial court abused its discretion.

Therefore, I concur in Judge Hathaway’s view that the order should be affirmed.

ORDERED: The order of the Superior Court of Pima County setting aside the judgment and default is affirmed.

NOTE: Judge HERBERT F. KRUCKER having requested that he be relieved from consideration of this matter, Judge JOHN A. McGUIRE was called to sit in his stead and participate in the determination of this decision.