The Arizona Supreme Court holds that default entry was invalid because Company was not properly served.

If you sue someone, you must serve them correctly. That sounds like a small step, but the Arizona Supreme Court just showed how much it matters. On July 30, 2026, the Court decided McMahan v. Grasshopper Trans, Inc. (CV-25-0287-PR). A plaintiff messed up service. He then got an entry of default against the trucking company. Later, the company showed up, filed an answer, and told the court more than once that it had been served. Did any of that fix the bad start? The Court said no. A default entered when the court has no power over a defendant is void. Nothing the defendant does later can bring it back to life.

In February 2023, a tractor trailer hit safety barricades at a construction site and drove off. The barricades struck Brandon McMahan, who was working there, and hurt him. The next year, he sued Grasshopper Trans, Inc., an Illinois company he believed owned the truck. He said the driver was careless. On March 6, 2024, his process server went to the office of Grasshopper’s Illinois statutory agent, Ljubisa Srejovic. The server, though, left the complaint with an assistant, Sladana Bojic. Bojic sent it on to Grasshopper the same day. But Bojic was never authorized or held out as someone who could accept legal papers for the company.

Grasshopper did not answer the lawsuit, so on April 15, 2024, McMahan applied for an entry of default. It took effect on April 29. McMahan asked for a default judgment in May. Grasshopper finally answered on June 11, denied owning the truck, and listed bad service as a possible defense. It twice tried to set the default aside and lost both times. In its own filings, it kept saying it had been “served” on March 6. Then, in February 2025, it argued for the first time that bad service was the real problem. The trial court agreed and threw out the default. The court of appeals reversed. The Arizona Supreme Court took the case.

The Court faced a few big questions: did McMahan really serve Grasshopper, and if not, was the entry of default void, and could Grasshopper’s later conduct save it? That second question broke into four parts: First, can anything a party does after a void default make it valid? Second, did Grasshopper give up its bad-service defense by skipping a Rule 12(b)(5) motion and not clearly raising it in the answer? Third, did its general appearance in the case give up the defect? Fourth, did its repeated statements that it had been served give up the defect? The Court answered no to each one.

Did McMahan really serve Grasshopper? Rule 4.2(h) says an out-of-state company must be served through a managing or general agent, or an agent named by appointment or by law. Srejovic was the registered statutory agent and could take service. The assistant, Bojic, could not. A sworn statement from Grasshopper’s owner said Bojic was not an officer, director, or managing agent, was never appointed, and was never held out as able to accept papers. The Court held that Arizona demands strict compliance with the service rules. The fact that Bojic passed the papers along the same day did not help. Actual notice is not the same thing as service.

Was the entry of default void and could Grasshopper’s later conduct save it? A court gains power over a defendant in one of three ways: proper service, consent, or a general appearance. On April 29, 2024, none of those had happened. So the default was void the moment it took effect. A void order has no legal force, and a judge must wipe it out when an affected party asks, even if that party waited far too long. The Court leaned on its decision in Lore v. Citizens Bank of Winslow. Under Lore, an appearance after a void judgment, general or special, will not cure the missing power. Later steps work going forward. They do not reach backward.

Next came the rules. Normally a defendant must raise bad service in a Rule 12(b)(5) motion or in a responsive pleading, or the defense is gone. The court of appeals said Grasshopper did neither, and it relied on Montano v. Scottsdale Baptist Hospital. The supreme sourt stepped around those details. It did not decide whether the June 11 answer saved the defense, whether the answer even counted as a responsive pleading, or whether a defaulted party could file such a motion at all. None of it mattered. Even if Grasshopper had waived the defense, the waiver would run only from June 11 forward. It could not work backward and validate a default that went void six weeks earlier.

McMahan also fell back on older common law. Under that doctrine, a general appearance puts a defendant under the court’s power and works like valid service. True enough, the Court said, but only from the day of the appearance. Grasshopper showed up six weeks after the default took effect. To be sure, federal courts are split on this. Some allow waiver based on conduct after judgment. Others take a firm line: no power means the judgment is always void and must be set aside. Arizona follows the firm line. Once an order is shown to be void, a judge has no choice and must vacate it.

That left Grasshopper’s own words. For months, its filings said it had been served on March 6. The court of appeals read those words as proof that the company had held Bojic out as its agent, so the default was never void. The supreme court disagreed. You measure apparent authority at the time of the claimed reliance, which here was March 6, 2024. Nothing in the record showed that by that date Grasshopper had told McMahan, his process server, or the public that Bojic could accept papers. Words spoken months later could not cause reliance on a day that had already passed.

The Court vacated the court of appeals’ opinion and put the trial court’s order back in place. The lesson here is simple. If you are the plaintiff, serve the named statutory agent and confirm who is really standing in that office. Handing papers to a helpful assistant may not count. That is true even when the company gets the complaint.   

Posted by:  Gideon Cionelo