Motion to Set Aside / Vacate Default Judgment (Debt) - Arizona

IN THE [☐ SUPERIOR COURT ☐ JUSTICE COURT] OF THE STATE OF ARIZONA

IN AND FOR THE COUNTY OF [____________] [☐ , [____________] PRECINCT]

Case No. [____________]

DEFENDANT'S MOTION TO SET ASIDE / VACATE DEFAULT JUDGMENT

Filed Pursuant to Ariz. R. Civ. P. 55(c) and 60(b)

Defendant, [____________] ("Defendant"), appearing [☐ self-represented / ☐ by and through undersigned counsel], respectfully moves this Court to set aside and vacate the default judgment entered against Defendant on [__/__/____], pursuant to Ariz. R. Civ. P. 55(c) and 60(b). In support, Defendant states as follows:

I. INTRODUCTION AND BASIS FOR RELIEF

1. This is a debt-collection action in which Plaintiff [☐ is a debt buyer / ☐ is a collection agency / ☐ claims to be the original creditor] seeks to collect an alleged consumer debt. A default judgment was entered against Defendant on [__/__/____] in the amount of $[____________], plus [interest, costs, and/or fees].

2. Defendant did not receive proper notice of this action and/or had good cause for not responding, has one or more meritorious defenses to the alleged debt, and brings this motion promptly upon learning of the judgment.

3. Arizona law disfavors default and favors resolving cases on their merits; doubts are resolved in favor of the party seeking to set aside a default judgment so the case can be heard.

II. IDENTIFICATION OF THE DEFAULT JUDGMENT

4. Date of judgment. The default judgment was entered on [__/__/____].

5. Amount. The judgment is in the amount of $[____________], consisting of [principal $[____], interest $[____], attorney's fees $[____], costs $[____]].

6. How Defendant learned of the judgment. Defendant first learned of the default judgment on [__/__/____] by the following means:

☐ A writ of garnishment of earnings served on Defendant's employer
☐ A writ of garnishment / levy on Defendant's bank account
☐ A judgment-debtor examination notice or other post-judgment process
☐ A credit report entry
☐ Other: [____________]

7. Defendant files this motion [____] days after first learning of the judgment, which is within a reasonable time and within the applicable deadline under Rule 60(c).

III. LEGAL STANDARD

8. Rule 55(c). "The court may set aside an entry of default for good cause, and it may set aside a default judgment under Rule 60(b)." Ariz. R. Civ. P. 55(c).

9. Rule 60(b) — relief from a final judgment. On motion and just terms, the court may relieve a party from a final judgment for: (1) mistake, inadvertence, surprise, or excusable neglect; (2) newly discovered evidence that could not have been discovered earlier with reasonable diligence; (3) fraud, misrepresentation, or misconduct by an opposing party; (4) the judgment is void; (5) the judgment has been satisfied, released, or discharged; or (6) any other reason justifying relief. Ariz. R. Civ. P. 60(b).

10. Standard for excusable neglect. To set aside a default judgment under Rule 60(b)(1), the movant must show (a) that the failure to answer was excusable — i.e., conduct that might be expected of a reasonably prudent person under the circumstances; (b) that the motion was promptly made; and (c) that the movant has a meritorious defense.

11. A judgment without valid service is void. A court acquires personal jurisdiction only through valid service of process under Ariz. R. Civ. P. 4, 4.1, and 4.2. A default judgment entered when the defendant was never properly served is void for lack of personal jurisdiction and must be set aside under Rule 60(b)(4) without regard to the merits or to any showing of a defense. Ariz. R. Civ. P. 12(b).

IV. GROUNDS FOR SETTING ASIDE THE JUDGMENT

☐ A. The judgment is VOID — defective or no service of process; lack of personal jurisdiction. Defendant was never validly served with the summons and complaint as required by Ariz. R. Civ. P. 4.1/4.2. Specifically: [describe — e.g., "Defendant did not reside at the address where service was attempted," "the affidavit of service reflects service on a person not residing there or not authorized to accept it," "no proper alternative service was authorized," "Defendant first learned of the suit through the garnishment"]. Because the Court lacked personal jurisdiction, the judgment is void and must be vacated. Ariz. R. Civ. P. 60(b)(4).

☐ B. Mistake, inadvertence, surprise, or excusable neglect. Defendant's failure to respond was excusable and not the product of carelessness, in that: [describe — e.g., "Defendant was hospitalized," "the papers were misdelivered or received late," "Defendant reasonably believed the matter had been resolved or disputed with the collector"]. The motion is promptly made and Defendant has a meritorious defense. Ariz. R. Civ. P. 60(b)(1).

☐ C. Fraud, misrepresentation, or misconduct. The judgment was obtained through fraud, misrepresentation, or misconduct by Plaintiff or its agents, including [describe — e.g., "a false affidavit of service," "misrepresentation of the amount owed," "concealment of the absence of any assignment"]. Ariz. R. Civ. P. 60(b)(3).

☐ D. Newly discovered evidence. Defendant has discovered evidence that could not, with reasonable diligence, have been discovered earlier, namely: [describe]. Ariz. R. Civ. P. 60(b)(2).

☐ E. Defendant has a meritorious defense (see Section V).

V. DEFENDANT HAS A MERITORIOUS DEFENSE

12. Defendant is prepared to present one or more meritorious, fact-supported defenses that, if proven, would defeat Plaintiff's claim:

☐ Statute of limitations. The alleged debt is time-barred. A debt evidenced by a written contract executed in Arizona, or by a credit card, must be sued upon within six (6) years (A.R.S. § 12-548(A)(2)); a debt not evidenced by a writing — an oral contract or a stated/open account — within three (3) years (A.R.S. § 12-543). Under Mertola, LLC v. Santos, 245 Ariz. 215 (2018), the limitations period on a credit-card balance runs from the first uncured missed payment. The last payment/activity occurred on or about [__/__/____], more than the applicable period before suit was filed.

☐ Not the debtor / mistaken identity / identity theft. Defendant is not the person who incurred the alleged debt and/or the account was opened or used as a result of identity theft. [Describe; attach FTC Identity Theft Report / police report as Exhibit [__].]

☐ Wrong amount. The amount of the judgment is incorrect, inflated, or includes unauthorized interest, fees, or charges. The correct balance, if any, is $[____________].

☐ Debt paid, settled, or discharged. The alleged debt was paid, settled, or discharged (including by discharge in bankruptcy on [__/__/____], Case No. [____________]) and is not owed.

☐ Plaintiff lacks standing / no chain of assignment. Plaintiff is not the original creditor and has not proven a complete, unbroken chain of assignment showing it owns Defendant's specific account; it is not the real party in interest under Ariz. R. Civ. P. 17(a).

☐ Plaintiff not licensed to collect in Arizona. Plaintiff and/or its predecessor operates as a "collection agency" (A.R.S. § 32-1001(2)) and was required to be licensed by the Arizona Department of Financial Institutions under A.R.S. § 32-1001 et seq., and has not shown it held a valid license at all relevant times. [Verify exemptions under A.R.S. § 32-1004.]

☐ No § 1692g validation; FDCPA violations. Plaintiff and/or its predecessor failed to provide the validation notice and verification required by 15 U.S.C. § 1692g and/or sued on a time-barred or unverified debt in violation of the FDCPA.

☐ Other meritorious defense: [____________]

13. These defenses are substantiated by the facts in Defendant's Declaration, below, and the attached exhibits, and are sufficient to warrant a trial on the merits.

VI. NO UNFAIR PREJUDICE TO PLAINTIFF; CONDUCT NOT CULPABLE

14. No unfair prejudice. Setting aside the judgment will not unfairly prejudice Plaintiff, which retains its evidence and its claim and loses only the advantage of a default. Defendant is prepared to proceed promptly.

15. Conduct not culpable. Defendant's failure to appear was not willful, intentional, or in bad faith; it resulted from [lack of valid service / excusable neglect], as set forth in the attached Declaration.

VII. DEFENDANT'S DECLARATION

I, [____________], declare:

1. I am the Defendant in this action, am over the age of 18, and am competent to testify. I make this declaration on personal knowledge.

2. I was never properly served with the summons and complaint in this case. [State the facts: where you lived on the date of attempted service; whether you received the papers; who, if anyone, was served; how you actually learned of the lawsuit.]

3. I first learned that a judgment had been entered against me on [__/__/____], when [describe — e.g., "my wages were garnished" / "my bank account was levied"].

4. I have a meritorious defense to Plaintiff's claim, namely: [state facts supporting the defense(s) checked above].

5. My failure to respond was not intentional and was not the result of any disregard of this Court. [State the facts establishing excusable neglect or lack of service.]

6. I ask the Court to set aside the default judgment, permit me to defend on the merits, and stay any collection in the meantime.

I declare under penalty of perjury that the foregoing is true and correct.

Executed on [__/__/____] at [____________], Arizona.

_______________________________________
[____________], Defendant

VIII. REQUEST TO STAY EXECUTION AND GARNISHMENT

16. Defendant requests that the Court stay execution on the judgment — including any writ of garnishment of earnings or of a bank account, levy, or other post-judgment process — pending the Court's ruling on this motion. Ariz. R. Civ. P. 62. Absent a stay, Defendant faces immediate and irreparable harm from the garnishment of wages or funds that may be exempt and that Defendant needs for basic living expenses, even though the underlying judgment is subject to being vacated.

17. Defendant further requests that any funds already garnished or levied be held by the garnishee or the Court, and not disbursed to Plaintiff, until this motion is decided.

IX. RELIEF REQUESTED

WHEREFORE, Defendant respectfully requests that this Court:

A. SET ASIDE and VACATE the default judgment entered on [__/__/____];

B. STAY all execution, garnishment, levy, and other post-judgment collection proceedings pending the Court's ruling, and order that any funds already garnished or levied be held and not disbursed;

C. QUASH any outstanding writ of garnishment or execution issued on the judgment;

D. GRANT Defendant leave to file an Answer and defend this action on the merits, with the accompanying [proposed] Answer deemed filed as of the date of the order;

E. Set this matter for a hearing if the Court deems one necessary; and

F. Grant such other and further relief as the Court deems just and proper.

X. PROPOSED ORDER

A proposed Order Setting Aside Default Judgment is submitted contemporaneously with this motion.

[PROPOSED] ORDER

This matter came before the Court on Defendant's Motion to Set Aside / Vacate Default Judgment under Ariz. R. Civ. P. 55(c) and 60(b). Having considered the motion, the supporting declaration, any response, and the applicable law, the Court finds that the motion is due to be GRANTED.

It is therefore ORDERED that the default judgment entered on [__/__/____] is SET ASIDE and VACATED; all garnishments, levies, and executions on that judgment are QUASHED and STAYED, and any garnished or levied funds shall be returned to Defendant; and Defendant is granted leave to file an Answer within [____] days of this Order.

DATED this ____ day of __________, 20____.

_________________________________
Judge / Justice of the Peace

XI. SIGNATURE

RESPECTFULLY SUBMITTED this [____] day of [____________], 20[____].

/s/ [____________________________________]
[____________________________________]
☐ Defendant, self-represented ☐ Attorney for Defendant
Arizona Bar No. (if attorney): [____________]
[Street Address]
[City], AZ [____]
Telephone: ([____]) [____]-[________]
Email: [____________________________________]

XII. CERTIFICATE OF SERVICE

I certify that on the [____] day of [____________], 20[____], I served a true and correct copy of the foregoing Defendant's Motion to Set Aside / Vacate Default Judgment, the supporting Declaration, and the proposed Order on Plaintiff's counsel of record (or on Plaintiff, if unrepresented) in accordance with Ariz. R. Civ. P. 5, by the following method:

☐ AZTurboCourt / Court electronic-filing system
☐ U.S. Mail, first-class postage prepaid
☐ Email (electronic service where permitted)
☐ Hand Delivery

Addressed to:

[____________________________________]
[____________________________________]
[____________________________________]

/s/ [____________________________________]
[____________________________________]

ARIZONA PRACTICE NOTES

• Authority: Ariz. R. Civ. P. 55(c) — the court may set aside an entry of default for good cause and a default judgment under Rule 60(b).
• Deadline: A motion under Rule 60(c) must be filed within a reasonable time, and for Rule 60(b)(1)–(3) NO MORE THAN SIX (6) MONTHS after entry of the judgment (Arizona's limit is 6 months, not the federal 1 year). A Rule 60(b)(4) (void judgment) or 60(b)(6) motion need only be filed within a "reasonable time." Confirm the entry date and calendar immediately.
• Excusable-neglect test: (1) conduct expected of a reasonably prudent person; (2) prompt motion; (3) a meritorious defense.
• Void for defective service: A judgment entered without valid service is void for lack of personal jurisdiction (Rule 60(b)(4)); the court must set it aside, and no separate showing of a defense is required. Common in debt cases where the consumer first learns of the suit through a garnishment ("sewer service").
• Stay collection: Request a stay of execution/garnishment under Rule 62 with the motion; ask that garnished funds be held pending the ruling.
• Small claims: If the judgment was entered in the small claims division of justice court, use the small-claims set-aside procedure (A.R.S. Title 22, Chapter 5; Arizona Rules of Small Claims Procedure); attorney representation and appeals are limited there.

Sources and References

• Arizona Rules of Civil Procedure: https://www.azcourts.gov/rules/Home/RulesofCivilProcedure
• Ariz. R. Civ. P. 55(c) — setting aside an entry of default / a default judgment.
• Ariz. R. Civ. P. 60(b), (c) — grounds for relief from a final judgment and timing (6 months for (b)(1)–(3); reasonable time otherwise).
• A.R.S. § 12-548 (written contract / credit card — 6 years): https://www.azleg.gov/ars/12/00548.htm
• A.R.S. § 12-543 (oral contract / open account — 3 years): https://www.azleg.gov/ars/12/00543.htm
• Mertola, LLC v. Santos, 245 Ariz. 215 (2018) — credit-card accrual: https://www.azcourts.gov/Portals/0/OpinionFiles/Supreme/2018/CV-17-0109-PR%20Opinion.pdf
• A.R.S. § 32-1001 et seq. (Collection Agencies): https://www.azleg.gov/arsDetail/?title=32
• Fair Debt Collection Practices Act, 15 U.S.C. § 1692 et seq.: https://www.ftc.gov/legal-library/browse/rules/fair-debt-collection-practices-act-text
• CFPB — time-barred debt: https://www.consumerfinance.gov/ask-cfpb/can-debt-collectors-collect-a-debt-thats-several-years-old-en-1423/