Searchtoppers.com, L.L.C. v. TrustCash LLC
293 P.3d 512
Ariz. Ct. App.2012Background
- Searchtoppers sued TrustCash for breach of a marketing-services contract and sought liquidated damages of about $95,000 plus interest and fees.
- TrustCash defaulted for failure to appear after failure to plead or defend, triggering Rule 55(a) default and a default effective date.
- Searchtoppers sought default judgment by motion under Rule 55(b)(1) because damages were liquidated, so no evidentiary hearing was required.
- TrustCash challenged both the entry of default and the subsequent default judgment, and moved to vacate under Rule 60(c).
- The trial court entered default judgment for $102,500 and denied TrustCash’s motion to vacate; TrustCash appealed.
- The principal issue on appeal was whether Rule 55(b)(2) notice/hearing is required for liquidated damages when default is entered by motion under Rule 55(b)(1).
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Rule 55(b)(1) vs. Rule 55(b)(2) notice for liquidated damages | Searchtoppers argues Rule 55(b)(1) allows judgment by motion for liquidated damages | TrustCash argues Rule 55(b)(2) requires a noticed hearing | Rule 55(b)(1) applies; no Rule 55(b)(2) notice required |
| Rule 60(c) relief from default judgment | TrustCash seeks relief for miscalculated damages and mitigation | TrustCash contends excusable neglect and meritorious defense exist | Court did not abuse discretion; denial of Rule 60(c) relief affirmed |
| Effect of appearance on notice requirements | Searchtoppers relies on Rule 55(b)(1) for liquidated damages | TrustCash argues appearance triggers Rule 55(b)(2) notice | Appearance does not convert liquidated-damages judgment into one requiring Rule 55(b)(2) notice |
Key Cases Cited
- BYS Inc. v. Smoudi, 228 Ariz. 573 (App. 2012) (liquidated damages and notice requirements under Rule 55(b) discussed)
- Tarr v. Superior Court, 142 Ariz. 349 (1984) (appearance concepts and Rule 55(b)(2) notice)
- Rogers v. Tapo, 72 Ariz. 53 (1951) (early rule interpretation on default judgments and appearances)
- Cales v. W.Va., 212 W. Va. 232 (2002) (analogous rule interpretation on Rule 55(b)(1) and lack of need for hearing)