Reliance on Existing Record Enough to Set Aside a Default Judgment

Reliance on Existing Record Enough to Set Aside a Default Judgment

The Arizona Supreme Court recently considered whether a defendant must submit additional evidence outside the existing record to establish a “meritorious defense” in a motion to set aside a default judgment under Arizona Rules of Civil Procedure 60(b).[1] The Supreme Court held in Gonzalez v. Nguyen, No. CV-17-0017-PR (April 12, 2018), a defendant may rely on the existing record and a trial court has broad discretion to determine whether a matter should be decided on the merits.


In Gonzalez, defendant Quoc Nguyen was driving a van owned by his employer, Dysart Hotel, when he rear-ended a truck being driven by Pablo Gonzalez. The police report noted the accident to have happened at 10 miles per hour and “no injury” occurred. Mr. Gonzalez however argued the accident was more severe which caused him extensive injuries requiring surgery, physical rehabilitation, and forced him to retire from the Maricopa County Sheriff’s Office.

Dysart Hotel notified its insurance claims administrator about the accident. A claims adjuster contacted Mr. Gonzalez’s attorneys and requested all communications be directed to him. Mr. Gonzalez filed a negligence action against Mr. Nguyen and Dysart Hotel (hereinafter “Dysart”) seeking compensatory damages. A demand letter was also sent to the claims adjuster seeking $716,242.50, including $600,000 for pain and suffering, and offering $695,000 to settle.

Dysart failed to file a responsive pleading. Mr. Gonzalez applied for an entry of default and sent copies to the claims adjuster and Dysart’s insurer. After a hearing at which Mr. Gonzalez’s attorneys presented evidence and Dysart failed to appear, the trial court entered a default judgment in the amount of $667,279.56.

Approximately two months after the trial court entered the default judgment, Dysart filed a Rule 60(b) motion to vacate the judgment’s damage award. After an oral argument, the trial court granted the motion to vacate the default judgment because it had “doubts about the fairness of the amount of the judgment” because it seemed too high. On appeal, the court of appeals reversed and reinstated the default damages judgment ruling Dysart had not presented a “meritorious defense” to support the motion. The Supreme Court granted review to consider the issue of the standards for relief from a default judgment under Rule 60(b)(6).

The Arizona Supreme Court Reverses the Imposition of Default Judgement

In reviewing Rule 60(b)(6), the Supreme Court first analyzes the words of the rule in the context in which they are used and look to secondary construction tools if the language is subject to more than one reasonable interpretations. Rasor v. Nw. Hosp., LLC, 243 Ariz. 160, 164 (2017). The Supreme Court noted the jurisprudence of Rule 60(b)(6) is not clear or consistent. The Supreme Court has previously ruled the application of Rule 60(b) should serve two different objectives. First, the law favors resolution on the merits and if the trial court has doubts about whether to vacate a default judgment, it should rule in favor of the moving party. Daou v. Harris, 139 Ariz. 353, 359 (1984). Second, a principle of finality in proceedings needs to be recognized and given effect. Id. The Supreme Court believes these two objectives provide great discretion in trial courts.

The Supreme Court clarified its previous rulings in which it consistently bounded a trial court’s discretion under Rule 60(b)(6) requiring a defendant to assert a meritorious defense. According to the Supreme Court, the meritorious defense burden is minimal. United States v. Aguilar, 782 F.3d 1101, 1108. The burden requires only some legal justification for the exercise of the power and some substantial evidence to support it. Richas v. Superior Court, 133 Ariz. 512, 514 (1982).

This led the Supreme Court to rule there is no requirement in the language or purpose of Rule 60(b)(6) requiring a meritorious defense supporting the motion to vacate must be established by evidence extraneous to the existing record. In the case at hand, the Supreme Court found the record provided a basis for Dysart’s assertion which was the amount of damages awarded possibly being excessive. The Supreme Court reviewed the police report description of the accident, and an affidavit from Mr. Gonzalez’s attorneys asserting Mr. Gonzalez incurred $68,683.58 in medical bills and $42,558.92 in lost wages. The trial court had also expressed concerns about the amount of damages it was awarding.


In cases where the trial court enters a default judgment with an excessive damages award, a good faith basis to vacate the judgment can be established based on the existing record. In this case, the Supreme Court applied two of Tyson & Mendes’ basic principles: reasonableness and common sense. The record did not support a default judgment award which was excessive compared to the description of the accident and economic damages.


[1] In 2016, the Arizona Rules of Civil Procedure were changed and Rule 60(c) was reorganized to Rule 60(b) without substantive change.

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