W.F. Conelly Construction Co. v. L. Harvey Concrete, Inc.

785 P.2d 94, 162 Ariz. 574, 50 Ariz. Adv. Rep. 84, 1989 Ariz. App. LEXIS 366
CourtCourt of Appeals of Arizona
DecidedDecember 21, 1989
Docket2 CA-CV 89-0069
StatusPublished
Cited by6 cases

This text of 785 P.2d 94 (W.F. Conelly Construction Co. v. L. Harvey Concrete, Inc.) is published on Counsel Stack Legal Research, covering Court of Appeals of Arizona primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
W.F. Conelly Construction Co. v. L. Harvey Concrete, Inc., 785 P.2d 94, 162 Ariz. 574, 50 Ariz. Adv. Rep. 84, 1989 Ariz. App. LEXIS 366 (Ark. Ct. App. 1989).

Opinion

OPINION

LACAGNINA, Judge.

W.F. Conelly Construction Co. (Conelly) appeals from an order granting L. Harvey Concrete, Inc.’s (Harvey) motion to dismiss Conelly’s petition to set aside a satisfaction of judgment for lack of jurisdiction. Conelly argues the superior court had equitable jurisdiction to set aside the satisfaction of judgment. We agree and reverse.

On September 17, 1986, Conelly filed a complaint for breach of its subcontract agreement with Harvey for concrete work on the minimum security addition to the new county jail. On November 17, 1987, the trial court by minute entry indicated that the parties had reached a stipulation for judgment and that the case had been settled. The parties agreed to the entry of judgment in favor of Conelly in the amount of $190,857, with no execution upon the judgment if prior to November 20, 1987, Harvey settled by payment of cash, assignment of certain beneficial interests in two notes and deeds of trust and by dismissal of two other lawsuits and the satisfaction of another judgment. The parties also agreed that after Harvey satisfied the above requirements, Conelly would provide Harvey with a partial satisfaction of judgment in the amount of $175,857 and would take no action on the balance of the judgment provided that within 60 days Harvey paid Conelly $15,000 in cash, at which time Conelly would deliver a full satisfaction of judgment.

On November 23, 1987, Conelly filed a partial satisfaction of judgment acknowl *576 edging receipt of $175,857, and on that same date judgment was entered for $190,-857. On January 15, 1988, Conelly filed a satisfaction of judgment acknowledging receipt of $190,857 and indicating that the amount satisfied the judgment in full.

On September 20, 1988, Conelly filed a petition for order to show cause why the satisfaction of judgment entered on January 15 should not be set aside and Conelly be allowed to proceed to execution against Harvey in the amount of $43,163.99. Co-nelly alleged that the beneficial interest in one of the promissory notes and deeds of trust assigned to Conelly for partial satisfaction was valueless. Conelly alleged that the note had been valued at $49,054. Co-nelly stated that although payments were made upon the promissory note according to its terms for approximately seven months, on or about May 18, 1988, the note was paid and satisfied in full but no part of the payoff was available to Conelly because of unpaid late charges that had accrued on an underlying note. Because of this, the note had been fully paid and discharged but Conelly had only been paid $5,890.01. Conelly argued the promissory note and deed of trust were represented as a valuable asset reasonably worth their face value and that although Conelly had made a reasonable investigation and inquiry, the unpaid late charges on the note were not disclosed to Conelly. Conelly alleged that this was a material and substantial misrepresentation of the value of the note upon which Conelly gave satisfaction.

Harvey filed a motion to dismiss the petition for lack of jurisdiction claiming that Conelly only alleged misrepresentation as a ground for relief under Ariz.R.Civ.P. Rule 60(c)(3), 16 A.R.S., and that the time had passed for relief under that section. Harvey also claimed that Conelly needed to file an independent action because a satisfaction of judgment extinguishes the judgment for all practical purposes. Harvey stated that it was not the maker of the promissory note, nor did it tender the security in the form of real property which stood behind the note. Therefore, the correct procedure was one in equity for an action against the person who had defaulted on the note and who had no part of this action.

On November 2, 1988, by minute entry the trial court granted the motion to dismiss finding as follows:

1. The cases of Romero v. DeConcini, McDonald & Brammer, 26 Ariz.App. 235, 547 P.2d 506 (1976) (satisfaction of judgment without consideration as to the balance may be set aside), and ADA Mechanical Services Inc. v. Goehring, 707 P.2d 1034 (Colo.App.1985) (satisfaction of judgment based upon void sale must be set aside), were distinguishable and did not support Conelly’s position;

2. The court lacked jurisdiction to hear the order to show cause petition;

3. Rule 60(c) did not provide the procedural remedy for the relief Conelly sought; and

4. Any claim Conelly had must be brought by a separate cause of action.

We reverse because we believe the trial court had jurisdiction to set aside the satisfaction of judgment and that the petition was brought in a timely manner.

RULE 60(c)

Initially, we note that the trial court was correct in concluding that Rule 60(c) did not provide the procedural remedy for relief sought by Conelly. The rule allows the court to relieve a party from “a final judgment, order or proceeding.” Conelly admits it does not want relief from the judgment; rather, it seeks to have the judgment enforced. A satisfaction of judgment is the discharge of an obligation by payment of the amount due, in this case arising out of a judgment entered against Harvey. It is a document indicating that the judgment has been paid. Black’s Law Dictionary at 1204-1205 (5th ed. 1979). However, when, as in this case, that judgment has only been partially satisfied, because of either misrepresentation or failure of consideration, the party seeking to set it aside is not requesting relief from the judgment but rather that the judgment be enforced. Therefore, the procedures under *577 Rule 60(c) for relief from final judgment or order of the court are not applicable to a petition or motion to set aside a satisfaction of judgment.

EFFECT OF SATISFACTION OF JUDGMENT

If a satisfaction of judgment is not a judgment or final order, what is the effect of this document on further proceedings?

A satisfaction of a judgment, entered of record by the act of the parties, is prima facie evidence that the creditor has received payment of the amount of the judgment or its equivalent, and operates as an extinguishment of the debt and a bar to further proceedings which continue on the theory that the judgment remains a subsisting obligation, except where the satisfaction was procured by fraud or duress, or without consideration, or on a condition which has not been performed, or was entered by the clerk without authority to do so. Thus, unless the case comes within such exceptions, no action lies on a satisfied judgment, and no further execution may issue, even with the consent of the parties, until the satisfaction is vacated and a new execution awarded by an order of the court in which the judgment was rendered.

49 C.J.S. Judgments § 583 at 1066 (1947) (footnotes omitted; emphasis added).

Harvey argues, and the trial court agreed, that acknowledging and satisfying the judgment is a fait accompli which cannot be undone without filing an independent action to set aside the satisfaction of judgment.

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Cite This Page — Counsel Stack

Bluebook (online)
785 P.2d 94, 162 Ariz. 574, 50 Ariz. Adv. Rep. 84, 1989 Ariz. App. LEXIS 366, Counsel Stack Legal Research, https://law.counselstack.com/opinion/wf-conelly-construction-co-v-l-harvey-concrete-inc-arizctapp-1989.