Arizona Court of Appeals, Division 1, grants special action relief finding a company had waived an insufficient-service-of-process defense.

In February 2023, a man working on a construction site was injured when a tractor-trailer crashed into nearby roadside barricades. A year later, in February 2024, the man sued the company that operated the tractor-trailer, and effectuated service by serving the company’s statutory agent. The agent was out of the office, so the complaint was ultimately served on the agent’s employee. In March 2024, the man filed an affidavit stating he had effectuated service.

By April 2024, the company had not responded to the suit, so the man moved for entry of default. After default became effective, the man moved for entry of default judgment in May 2024.

It was only at this point that the company filed an answer responding to the substantive allegations of the man’s complaint, raising several affirmative defenses. Insufficient service of process was not explicitly included as an affirmative defense, but as a potential defense that, at the time of pleading, the company did not have enough facts to plead. The company also moved to set aside entry of default; in doing so, the company asserted that it acted expediently upon being served, and did not argue failure to serve as a means for setting aside default. The company’s reply in support of its motion similarly asserted that the company had moved swiftly upon being served.

The superior court denied the company’s motion, determining that the company had failed to respond in a timely manner after being served. The company then moved for Rule 60 relief, arguing the court had erred in denying its motion to set aside entry of default, again arguing that it had been properly served and moved promptly thereafter. The superior court denied the motion. The company then filed a motion for reconsideration, arguing for the first time (and nearly a year after the case commenced) that it had not been properly served. This time, the superior court agreed with the company and ultimately vacated the entry of default. The man then sought special action relief, arguing that the superior court had erred in vacating the entry of default because the company had waived that argument.

The Court of Appeals accepted jurisdiction and granted relief. The Court concluded that the company had waived an insufficient-service-of-process defense. The Court explained that Rule 12(b)(5) requires that an insufficient service of process defense be raised as early as possible, either by motion or by pleading it as an affirmative defense, and the company had done neither. It was insufficient to include it as a potential defense, particularly on the record in this case, where the facts on which the defense turned were available to the company from the outset.

Regardless, the Court explained, a party can waive an insufficient-service-of-process defense through its litigation conduct, and the company had done exactly that. The company had appeared voluntarily to litigate the case, and repeatedly represented in its case filing that it had been served. This litigation conduct unequivocally demonstrates that the company had notice of the suit, so the company waived insufficient-service-of-process as a potential defense.

Judge Jacobs authored the opinion, joined by Judges Bailey and Howe.

Posted by: Joshua J. Messer