Imh v. Maniatis

NOTICE: NOT FOR OFFICIAL PUBLICATION.
UNDER ARIZONA RULE OF THE SUPREME COURT 111(c), THIS DECISION IS NOT PRECEDENTIAL
AND MAY BE CITED ONLY AS AUTHORIZED BY RULE.

IN THE
ARIZONA COURT OF APPEALS
DIVISION ONE

IMH SPECIAL ASSET NT 168 LLC, et al., Plaintiffs/Appellees,

v.

DAVID P. MANIATIS, Defendant/Appellant.
______________________________________

DAVID P. MANIATIS, Appellant,

v.

DANIEL WILLIAMS, Appellee.
______________________________________

IMH SPECIAL ASSET NT 168 LLC, et al.,
Real Parties in Interest/Appellees,
______________________________________

IMH SPECIAL ASSET NT 168 LLC, et al., Plaintiffs/Appellees,

v.

MW2 INVESTMENTS, LLC, et al., Intervenors/Appellants.

No. 1 CA-CV 19-0454
1 CA-CV 19-0494
1 CA-CV 20-0022
(Consolidated)
FILED 4-8-2021
 Appeal from the Superior Court in Maricopa County
No. CV2010-010943
CV2010-010990
(Consolidated)
The Honorable James D. Smith, Judge

AFFIRMED

COUNSEL

Snell & Wilmer LLP, Phoenix
By Christopher H. Bayley, Benjamin W. Reeves, James G. Florentine
Counsel for Plaintiffs/Appellees IMH Special Asset NT 161, LLC and IMH
Special Asset NT 168, LLC

Ronald Warnicke PLC, Phoenix
By Ronald E. Warnicke
Co-Counsel for Defendant/Appellant Maniatis

Treon & Aguirre PLLC, Phoenix
By Richard T. Treon
Co-Counsel for Defendant/Appellant Maniatis

Jeffrey M. Proper PLLC, Phoenix
By Jeffrey M. Proper
Counsel for Intervenors/Appellants MW2 Investments LLC and Robert Semple
as Trustee of the NDM Trust

MEMORANDUM DECISION

Presiding Judge Jennifer M. Perkins delivered the decision of the Court, in
which Judge Randall M. Howe and Judge Maria Elena Cruz joined.

P E R K I N S, Judge:

¶1 David Maniatis appeals the superior court’s judgment and
denial of his motions to vacate a receivership order pursuant to Arizona
Rule of Civil Procedure 60. MW2 Investments LLC (“MW2”) and Robert
Semple (collectively “Intervenors”) appeal the court’s denial of their Rule
60 motion for new trial. For the following reasons, we affirm.

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FACTUAL AND PROCEDURAL BACKGROUND

I. IMH Obtains Judgment Against Maniatis

¶2 In April 2010, IMH Special Asset NT 168, LLC and IMH
Special Asset NT 161, LLC (collectively “IMH”) initiated deficiency actions
against Maniatis and others to collect on two loans. The superior court
found that Maniatis defaulted on the loans and entered summary judgment
in IMH’s favor (“Original Judgment”). Maniatis timely appealed the
Original Judgment.

¶3 In December 2016, we vacated and remanded the Original
Judgment in part. See IMH Special Asset NT 168, LLC v. Aperion Cmtys., LLLP
(“Aperion”), 1 CA-CV 13-0131, 2016 WL 7439001 (Ariz. App. Dec. 27, 2016)
(mem. decision). We held the superior court “correctly entered summary
judgment for [IMH] regarding the fact of [Maniatis’s] defaults” but “a
genuine dispute of material fact regarding the default balances” existed. Id.
at *6, *10, ¶¶ 31, 53. We remanded the case to calculate the default balances
owed to IMH, noting that “even if [IMH does] not prove its claimed
deficiency balances upon remand, substantial deficiency balances will still
exist under [Maniatis’s] version of the facts.” Id. at *6, ¶ 33. Because we held
the superior court erred in granting summary judgment for the default
balances, we dismissed all appeals from post-Original Judgment orders as
moot. Id. at *10, ¶ 53.

¶4 IMH moved for reconsideration of Aperion. We granted in
part to clarify that any modified judgment on remand shall be ordered nunc
pro tunc to the date of the Original Judgment for calculating default interest.

¶5 The superior court then held two trials to establish (1) the
deficiency balances Maniatis owed IMH and (2) the amounts IMH
recovered on the Original Judgment. After conducting both trials, the
superior court entered judgment in IMH’s favor for $36,229,585.70 (“Final
Judgment”).

II. Collection on the Original Judgment Pending Appeal

A. The Superior Court Appoints Two Receivers

¶6 Maniatis failed to obtain a stay pending his appeal of the
Original Judgment, so IMH pursued collection efforts. IMH and Maniatis
entered a court-approved stipulation requiring Maniatis to transfer all
ownership interests in his closely held companies to a limited liability

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company created for receivership (“Stockholder LLC”). The superior court
then appointed a receiver over Stockholder LLC.

¶7 IMH sought appointment of a second receiver after Maniatis
breached the stipulation. Facing a delay after Maniatis’s then-counsel
withdrew, IMH renewed its application for a second receiver by filing an
“emergency motion for an ex parte interim receiver” (“Receiver
Application”). The superior court granted IMH’s application and
appointed MCA Financial Group, Ltd. (“MCA Financial”), by and through
Keith Bierman (collectively “Receiver”), as receiver over all property
owned or controlled by Maniatis (“Receivership Order”).

¶8 The court eventually amended the Receivership Order to
include a non-exhaustive list of companies and assets Maniatis owned or
controlled, including Seagoville Investments, LLLP (“Seagoville”) and the
NDM Trust.

B. Maniatis and Intervenors Attempt to Thwart the Receivership

¶9 The Receiver discovered that before the formation of the
receivership, Maniatis executed a purchase and sale agreement (“Seagoville
PSA”) on behalf of Seagoville to sell property in Texas to Equitable Real
Estate Company, LLC (“Equitable Real Estate”). Seagoville failed to timely
close and Equitable Real Estate sued for specific performance of the
Seagoville PSA.

¶10 Instead of litigating, the Receiver, Equitable Real Estate, and
IMH jointly moved the superior court to (1) allow the Receiver to exercise
Seagoville’s rights as seller under the Seagoville PSA and (2) authorize IMH
to purchase Equitable Real Estate’s interest under the Seagoville PSA. The
superior court granted the motion (“Seagoville Sale Order”) and completed
the transaction pursuant to the Seagoville PSA. IMH eventually sold the
Texas property and transferred the proceeds to the receivership estate.

¶11 Shortly after the superior court issued the Seagoville Sale
Order, Maniatis attempted to appoint Semple as trustee of the NDM Trust.
Claiming authority over the NDM trust, Semple moved to vacate the
amended Receivership Order. Alternatively, Semple asked the court to
exclude the NDM trust from the receivership. The superior court denied
Semple’s request, declaring Maniatis’s “attempt to install Mr. Semple as a
successor Trustee is void because it violates the Receivership Order . . . and
. . . Arizona Trust Code.” The court also prohibited Semple from filing
anything in the receivership proceedings absent court permission.

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¶12 Undeterred, Semple then purchased membership interests in
MW2 and attempted to intervene in the receivership proceedings on MW2’s
behalf. The superior court denied MW2’s request, explaining that “if MW2
has an interest in a receivership asset, [such as the Seagoville property or its
sale proceeds,] there is a process for MW2 to protect that interest by
submitting a claim.” The court similarly prohibited MW2 from filing
anything in the receivership proceedings absent court permission.

¶13 MW2 submitted a claim to the Receiver, seeking a distribution
from the receivership estate. The Receiver denied MW2’s request. The
superior court approved the Receiver’s proposed final distribution of estate
assets (“Wind-Up Order”) and discharged the Receiver.

C. MW2 Brings Separate Action Against IMH

¶14 After numerous failed intervention attempts, MW2 sued
IMH. MW2 challenged several of the superior court’s post-Original
Judgment receivership orders and demanded a share of the Seagoville sale
proceeds. The superior court dismissed MW2’s action and we affirmed. See
MW2 Invs. LLC v. IMH Special Asset NT 168 LLC (“MW2 Investments”), 1 CA-
CV 18-0271, 2019 WL 6910436 (Ariz. App. Dec. 19, 2019) (mem. decision).

III. Maniatis and Intervenors Seek Relief from Final Judgment

¶15 Maniatis filed several motions seeking relief from the Final
Judgment pursuant to Rules 59 and 60. Relevant to this appeal, Maniatis
asked the court to vacate the Receivership Order for lack of jurisdiction and
denial of due process (“First Rule 60 Motion”). Maniatis then asked the
court to void the Receivership Order for fraud on the court (“Second Rule
60 Motion”).

¶16 Intervenors also moved the superior court to vacate the Final
Judgment (“Post-Judgment Motion”), repeating Maniatis’s jurisdictional
arguments. In the Post-Judgment Motion, Intervenors sought to
“incorporate by reference [Maniatis’s First and Second Rule 60] Motions in
their entirety.”

¶17 The superior court denied all of Maniatis and Intervenors’
motions. As to Maniatis’s First Rule 60 Motion, the court explained “[i]t
would be an improper horizontal appeal for [it] to review the propriety of
predecessor judicial officers’ orders from February 2014 through April
2015.” As to Maniatis’s Second Rule 60 Motion, the court noted that
Maniatis’s fraud on the court argument “is a variation of the same argument

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[he] has raised—and judicial officers have rejected—throughout this
matter.”

¶18 The superior court declined to address Intervenors’
arguments raised in the Post-Judgment Motion. The court instead noted
“Semple is not the trustee of NDM Trust, so he lacks authority to argue on
its behalf” and “[Intervenors] violated the Court’s earlier orders requiring
them to obtain a leave of Court before filing [more] papers.”

¶19 Maniatis and Intervenors timely appealed the superior court’s
Final Judgment and order denying their Rule 60 motions, which are
consolidated into this appeal. We have jurisdiction under Article 6, Section
9, of the Arizona Constitution and A.R.S. §§ 12-120.21(A)(1) and -2101(A).

DISCUSSION

¶20 We consider four issues on appeal: (1) the superior court’s
denial of Maniatis’s First Rule 60 Motion; (2) the superior court’s denial of
Maniatis’s Second Rule 60 Motion; (3) the superior court’s entry of the Final
Judgment nunc pro tunc; and (4) the superior court’s denial of Intervenors’
Post-Judgment Motion.

¶21 As an initial matter, we do not address the numerous
arguments raised by Maniatis and Intervenors challenging the Receivership
Order. The time to appeal the Receivership Order from 2014 has long
passed. See A.R.S. § 12-2101(A)(5)(b) (court order appointing a receiver
must be appealed within thirty days); see also Sato v. First Nat’l Bank of Ariz.,
12 Ariz. App. 263, 266 (App. 1970) (failure to appeal order appointing a
receiver precludes a party from later raising issue on appeal from final
judgment). We therefore lack jurisdiction to address challenges to the
Receivership Order. See In re Marriage of Thorn, 235 Ariz. 216, 218, ¶ 5 (App.
2014).

¶22 We similarly decline to address challenges to the Receiver’s
actions taken pursuant to the Receivership Order, including the Seagoville
Sale Order and Wind-Up Order. An order confirming a receiver’s actions is
an appealable order. Foster v. Ames, 3 Ariz. App. 206, 208 (App. 1966). But
Maniatis and Intervenors’ failure to timely appeal these orders precludes
them from attacking the orders’ validity on appeal. See Hurst v. Hurst, 1
Ariz. App. 603, 605 (App. 1965).

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I. Maniatis’s Claims

¶23 Maniatis raises several challenges to the superior court’s
denial of his First and Second Rule 60 Motions. He argues the superior court
erred in denying his First Rule 60 Motion to vacate the Receivership Order
for lack of jurisdiction. Maniatis then argues the court erred in denying his
Second Rule 60 Motion alleging fraud on the court. Finally, Maniatis argues
the court improperly entered the Final Judgment nunc pro tunc.

A. Maniatis’s First Rule 60 Motion

¶24 Maniatis first contends the Receivership Order is void
because the superior court lacked subject matter jurisdiction, lacked
personal jurisdiction, and failed to hold a hearing after entering the
Receivership Order. We review the denial of a Rule 60(b)(4) motion de novo.
Laveen Meadows Homeowners Ass’n v. Mejia, 249 Ariz. 81, 84, ¶ 10 (App.
2020).

¶25 Rule 60(b)(4) allows a party to seek relief from a “void” final
judgment or order when “the court entering it lacked jurisdiction (1) over
the subject matter, (2) over the person involved, or (3) to render the
particular judgment or judgment entered.” Martin v. Martin, 182 Ariz. 11,
15 (App. 1994). Maniatis bears the burden of demonstrating the challenged
orders are void. See Cockerham v. Zikratch, 127 Ariz. 230, 235 (1980). The
scope of an appeal from a denial of a Rule 60 motion is restricted to the
questions raised by the motion to vacate. See Hirsch v. Nat’l Van Lines, Inc.,
136 Ariz. 304, 311 (1983).

¶26 Maniatis argues the superior court lacked subject matter
jurisdiction to appoint the Receiver. We disagree. Subject matter
jurisdiction is a court’s statutory or constitutional authority to hear a certain
type of case. Sheets v. Mead, 238 Ariz. 55, 57, ¶ 9 (App. 2015). The superior
court has statutory authority to appoint a receiver. A.R.S. § 12-1241. The
superior court may likewise appoint a receiver as an equitable remedy to
protect property subject to pending litigation. Ariz. R. Civ. P. 66. The
superior court thus had subject matter jurisdiction over the proceeding and
parties.

¶27 Maniatis’s next argument, that the superior court lacked
personal jurisdiction over himself and his assets, also fails. Maniatis failed
to assert this defense by initial motion or to plead it in his answer. See Ariz.
R. Civ. P. 12(h). He therefore waived this defense. See id. (party waives
personal jurisdiction defense by omitting it from a motion or responsive
pleading); see also Tarr v. Superior Court, 142 Ariz. 349, 351 (1984)

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(participating in a pending case, other than to contest jurisdiction, subjects
defendants to the court’s jurisdiction).

¶28 Finally, Maniatis argues the superior court failed to satisfy the
“additional jurisdictional requirements” necessary to create a receivership
because Rule 66 requires the court to set a hearing within ten days of
appointing a receiver ex parte. We find no such requirement. The plain
language of the statute expressly states “[i]f a party applies for appointment
of a receiver without notice, the court may either grant the application or
. . . order the applicant to serve the adverse party and set a hearing.” Ariz.
R. Civ. P. 66(a)(3) (emphasis added). While the superior court was under no
obligation to set a hearing, the court still offered Maniatis an opportunity
to contest the appointment by requesting a hearing—an opportunity
Maniatis failed to seize.

¶29 The superior court did not err in denying Maniatis’s First Rule
60 Motion.

B. Maniatis’s Second Rule 60 Motion

¶30 Maniatis next contends the superior court erred by denying
his Second Rule 60 Motion seeking to vacate the Receivership Order for
fraud on the court. The superior court “enjoy[s] broad discretion when
deciding whether to set aside judgments,” and we review its ruling for an
abuse of discretion. See Skydive Ariz., Inc. v. Hogue, 238 Ariz. 357, 364, ¶ 24
(App. 2015). We will affirm “unless undisputed facts and circumstances
require a contrary ruling.” City of Phoenix v. Geyler, 144 Ariz. 323, 330 (1985)
(internal quotation marks omitted).

¶31 Rule 60(d)(3) permits the court to set aside a judgment for
fraud on the court “[w]hen a party obtains a judgment by concealing
material facts and suppressing the truth with the intent to mislead the
court.” Clark v. Kreamer, 243 Ariz. 272, 275, ¶ 13 (App. 2017) (quoting Cypress
on Sunland Homeowners Ass’n v. Orlandini, 227 Ariz. 288, 299, ¶ 42 (App.
2011)). “[T]he moving party must prove the fraud by clear and convincing
evidence.” Id.

¶32 At the outset, we decline to address several of Maniatis’s
arguments. Maniatis previously argued that IMH committed fraud on the
court because (1) IMH’s counsel failed to disclose a series of charging order
statutes in the Receiver Application; (2) IMH and the Receiver entered a
joint defense agreement; and (3) the Receiver’s counsel previously
represented an IMH subsidiary in unrelated matters. The superior court
already rejected these arguments before Maniatis’s Second Rule 60 motion,

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and we will not address those arguments here. See Budreau v. Budreau, 134
Ariz. 539, 541 (App. 1982) (“[Rule 60(b)] cannot be used as a substitute for
appeal to relitigate issues which have already been finally determined.”).

¶33 Maniatis broadly argues that IMH committed fraud on the
court by discussing “background facts and pleadings” with MCA Financial
before the superior court issued the Receivership Order. But Maniatis fails
to show how this amounted to “the most egregious conduct involving a
corruption of the judicial process itself.” See Alvarado v. Thomson, 240 Ariz.
12, 16, ¶ 17 (App. 2016) (quoting Lake v. Bonham, 148 Ariz. 599, 601 (App.
1986)). And the fact that IMH failed to disclose its communications with
MCA Financial does not by itself amount to fraud on the court. See, e.g., id.
at 17, ¶ 23 n.5 (failure to disclose material information does not amount to
fraud on the court).

¶34 Maniatis next contends the Receiver breached its duty to act
as a neutral officer of the court because it received payment from IMH. This
contention fails for several reasons. First, the superior court was fully aware
the Receiver acted in IMH’s interest as a judgment creditor; the
Receivership Order directed the Receiver to do just that. Second, the
Receivership Order expressly provided that IMH may reimburse the
Receiver for its fees and expenses. Nothing about this arrangement is
“secret” as Maniatis alleges. Third, the court approved all funds IMH
advanced to the Receiver to pay for the costs of the receivership estate. And
Maniatis never objected.

¶35 In Maniatis’s final challenge to the superior court’s denial of
his Second Rule 60 Motion, he claims IMH’s failure to disclose its prior
business relationship with MCA Financial prevents MCA Financial from
serving as receiver in the present case. To support this argument, Maniatis
notes IMH hired MCA Financial as a consultant during a bankruptcy
proceeding in 2013. Other than highlighting IMH’s previous engagement
with MCA Financial and asserting that this engagement made “[MCA
Financial] beholden to [IMH] for its fees,” Maniatis provides no support for
how this alleged nondisclosure amounted to fraud on the court. See, e.g.,
McNeil v. Hoskyns, 236 Ariz. 173, 178, ¶ 23 (App. 2014) (even a “false
statement to the court about a matter in dispute rarely will constitute a
fraud on the court”).

¶36 The superior court did not err in denying Maniatis’s Second
Rule 60 Motion.

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C. Final Judgment

¶37 Maniatis next argues the entirety of the superior court’s
rulings are void because we partially vacated the Original Judgment in
Aperion. This is essentially the same failed argument that MW2 raised in
MW2 Investments. See 1 CA-CV 18-0271, at *5, ¶¶ 22–24.

¶38 In Aperion, we held that although IMH was entitled to
summary judgment with respect to Maniatis’s defaults, questions of fact
remained about the balance owed. 1 CA-CV 13-0131 at *5–6, ¶¶ 29–30. We
then vacated the Original Judgment and remanded the case, directing the
superior court to determine the amount owed. Id. at *6, ¶¶ 30–33. We
reasoned “even if [IMH does] not prove [its] claimed deficiency balances
upon remand, substantial deficiency balances will still exist even under
[Maniatis’s] version of the facts.” Id. at *6, ¶ 33. IMH sought reconsideration
with this court and we ordered that any judgment entered on remand be
entered nunc pro tunc to the date of the Original Judgment.

¶39 Maniatis’s argument that IMH “must literally . . . begin [its]
collection efforts anew” is irreconcilable with our decision in Aperion. We
expressly held that IMH’s “judgment-collection efforts must be considered
as they apply to [the] undisputed amounts” Maniatis owed IMH. Id.
(emphasis added). Because IMH was still entitled to a “substantial
deficiency balance,” this court’s prior ruling did not vacate the Receivership
Order or its subsequent actions as Maniatis contends. Id.

¶40 Maniatis further claims the nunc pro tunc doctrine prohibits
the superior court from making these types of changes. Maniatis cites no
authority—and we have found none—for the proposition that the doctrine
of nunc pro tunc prevents the superior court from entering judgment for
purposes of calculating default interest. Under Rule 58(b)(2)(a), the superior
court may enter judgment nunc pro tunc “in such circumstances on such
notice as justice may require.” We decline to interpret this language as
Maniatis requests.

¶41 We reject Maniatis’s claims and hold the superior court did
not err in issuing its Final Judgment.

D. Waived Arguments

¶42 Maniatis fails to develop his argument concerning the order
discharging the receiver over Stockholder LLC. We therefore decline to
address it. See ARCAP 13(a)(7); see also Boswell v. Fintelmann, 242 Ariz. 52,

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54, ¶ 7 n.3 (App. 2017) (failure to develop and support conclusory
arguments waives them).

E. Judicial Notice

¶43 After filing his opening brief, Maniatis requested that we take
judicial notice of several of IMH’s parent corporation’s filings with the
Securities and Exchange Commission and the United States Bankruptcy
Court for the District of Delaware. We deferred ruling on Maniatis’s motion
until ruling on the merits of this appeal. We deny Maniatis’s motion
because the material is irrelevant to our resolution of this appeal.

II. Intervenors’ Claims

¶44 Intervenors argue the superior court erroneously denied their
Post-Judgment Motion to vacate the Final Judgment. We review the
superior court’s ruling on a Rule 60(b) motion for an abuse of discretion,
Sign Here Petitions LLC v. Chavez, 243 Ariz. 99, 108, ¶ 35 (App. 2017), but
review whether an order is void de novo. BYS Inc. v. Smoudi, 228 Ariz. 573,
578, ¶ 18 (App. 2012).

A. Horizontal Appeal Doctrine

¶45 Intervenors first contend the superior court erred in applying
the horizontal appeal doctrine. But this challenges the superior court’s
denial of Maniatis’s First Rule 60 Motion—not the court’s denial of
Intervenors’ Post-Judgment Motion. Even assuming, without deciding, that
Intervenors may challenge the denial of Maniatis’s First Rule 60 Motion,
which they purport to have incorporated by reference, the superior court
did not err in applying the horizontal appeal doctrine. Because Maniatis
asked a trial judge to review an earlier trial judge’s decision in the same
matter, and Maniatis failed to present new evidence justifying review, the
superior court did not err by declining review. See Powell-Cerkoney v. TCR-
Mont. Ranch Joint Venture, II, 176 Ariz. 275, 278–79 (App. 1993) (“We criticize
horizontal appeals because they waste judicial resources . . . .”).

B. Additional Arguments

¶46 Intervenors raise three additional arguments in passing to
support their claims that the superior court erred in denying their Post-
Judgment Motion. They contend that (1) IMH committed extrinsic fraud;
(2) Receiver breached its fiduciary duty; and (3) the superior court lacked
subject matter jurisdiction.

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¶47 First, Intervenors argue that IMH committed extrinsic fraud.
Extrinsic fraud includes “deception practiced by the successful party in
purposely keeping his opponent in ignorance.” Bates v. Bates, 1 Ariz. App.
165, 168 (App. 1965). The party seeking relief from a judgment based on
extrinsic fraud must establish the existence and non-disclosure of the
evidence in question. See Nw. Bank (Minn.), N.A. v. Symington, 197 Ariz. 181,
185–87, ¶¶ 15–23 (App. 2000). Aside from Intervenors’ assertion that IMH
committed extrinsic fraud, Intervenors fail to articulate what evidence IMH
intentionally withheld from the court to obtain the Final Judgment.
Intervenors’ argument therefore fails. See id.

¶48 Second, Intervenors argue that Receiver breached its
fiduciary duty “owed to Seagoville and MW2.” But Intervenors failed to
raise this argument in their Post-Judgment Motion. We therefore do not
address it. See Hirsch, 136 Ariz. at 311 (“The scope of an appeal from a denial
of a Rule 60 motion is restricted to the questions raised by the motion to set
aside . . . .”).

¶49 Finally, Intervenors argue the superior court lacked subject
matter jurisdiction to appoint the Receiver. As explained above, supra ¶ 26,
we reject this argument.

III. Attorneys’ Fees

¶50 Intervenors and IMH request attorneys’ fees under A.R.S.
§ 12-341.01(A). We award IMH reasonable attorneys’ fees on appeal subject
to its compliance with ARCAP 21.

CONCLUSION

¶51 We affirm.

AMY M. WOOD • Clerk of the Court
FILED: AA

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