Donald Hales and Marena Hales v. Dallas Baldry and Rylee Baldry

IN THE

ARIZONA COURT OF APPEALS

DIVISION TWO

DONALD HALES AND MARENA HALES, AS TRUSTEES OF THE HALES FAMILY

TRUST AGREEMENT, DATED AUGUST 24, 2010,

Plaintiffs/Appellees,

v.

DALLAS BALDRY AND RYLEE BALDRY, HUSBAND AND WIFE,

Defendants/Appellants.

No. 2 CA-CV 2025-0234

Filed July 9, 2026

THIS DECISION DOES NOT CREATE LEGAL PRECEDENT AND

MAY NOT BE CITED EXCEPT AS AUTHORIZED BY APPLICABLE RULES.

NOT FOR PUBLICATION

See Ariz. R. Sup. Ct. 111(c)(1); Ariz. R. Civ. App. P. 28(a)(1), (f). Appeal from the Superior Court in Maricopa County No. CV2024003772

The Honorable Brian J. Palmer, Judge

AFFIRMED

COUNSEL

Holland Law Group PLLC, Scottsdale By Jared E. Holland and William R. Bolger Counsel for Plaintiffs/Appellees Dallas Baldry, Chandler

In Propria Persona

1

2

MEMORANDUM DECISION

Presiding Judge Vásquez authored the decision of the Court, in which Vice Chief Judge Eppich and Judge Sklar concurred.

V Á S Q U E Z, Presiding Judge:

In this contract action, Dallas Baldry appeals from the superior court's default judgment and its order denying his motion for a new trial and/or to alter or amend the judgment. On appeal, Baldry argues the court abused its discretion by: (1) refusing to set aside the entry of default, (2) "excluding evidence directly relevant to damages,"

(3) attributing losses to him rather than other "entities involved in the underlying transactions," (4) denying his post-judgment motions under Rules 59 and 60,¹Ariz. R. Civ. P., and (5) awarding attorney fees against him. For the reasons that follow, we affirm.

Factual and Procedural Background

"We view the facts in the light most favorable to upholding the court's ruling on a motion to set aside a default judgment." Ezell v. Quon, 224 Ariz. 532, ¶ 2 (App. 2010). In October 2018, appellees, Donald Hales and Marena Hales, as trustees of the Hales Family Trust Agreement, dated August 24, 2010, loaned $200,000 to RX2 Orlando, LLC (the "LLC"). The loan was evidenced by a promissory note signed by Dallas Baldry on behalf of the LLC. Baldry, his wife Rylee Baldry, Kevin Kortsen, and Darla Kortsen signed a personal guaranty "unconditionally and irrevocably guarantee[ing] the full, faithful and timely payment and performance . . . of all payments, covenants and other obligations" under the promissory note. After the LLC defaulted on the loan, the Hales sued the LLC and the Baldrys for breach of contract.²

3

After filing their complaint, the Hales made several attempts to serve the LLC and the Baldrys, but their efforts were unsuccessful. The Hales then requested authorization for service by alternative means, noting that they had reviewed the Arizona Corporation Commission's records and discovered that the LLC "was never formed as an Arizona limited liability company and does not exist." The superior court granted the request, permitting service "via Dallas Baldry's last known email address" and by mailing to the LLC's and the Baldrys' "last known business and residential address" and attaching copies of the summons and complaint on the front door or gate of that address.

The Hales subsequently filed proof that service had been completed. And on June 14, 2024, the Hales filed their application for entry of default asserting that the defendants had "failed to plead or otherwise defend within the time allowed by the [Arizona Rules of Civil Procedure]."

On June 19, the Baldrys filed a petition to set aside the application for entry of default and requested an extension to file a response to the complaint. After a hearing, the superior court denied their petition. On December 11, the Hales filed a "Motion for Default Judgment (with Hearing)." Following an evidentiary hearing held over two days in February and March 2025, the court entered a default judgment. The Baldrys then moved for a new trial or to alter or amend the judgment pursuant to Rule 59, Ariz. R. Civ. P., which the court denied. This appeal followed.³We have jurisdiction pursuant to A.R.S. §§ 12-120.21(A)(1) and 12-2101(A)(1), (A)(5)(a).

Discussion

I. Denial of Motion to Set Aside Entry of Default

Baldry argues the superior court abused its discretion by refusing to set aside the entry of default. We review the court's ruling for a clear abuse of discretion. Champlin v. Bank of Am., N.A., 231 Ariz. 265, ¶¶ 7-8 (App. 2013). Although an order denying a motion to set aside entry of default is not appealable, Rueda v. Galvez, 94 Ariz. 131, 133 (1963), we may

4

nevertheless address arguments challenging the entry of default to the extent they are urged as grounds to set aside the default judgment, see BYS Inc. v. Smoudi, 228 Ariz. 573, ¶¶ 6, 15-16 (App. 2012). It is a "settled rule in this jurisdiction that an appeal may not be taken from a default judgment without first having presented a motion to the lower court for relief." Indus. Comm'n v. Parise, 13 Ariz. App. 522, 523 (1970). Such motions include those "to set aside the default judgment under Rule 55(c), [Ariz. R. Civ. P.,] or for mistake, inadvertence, surprise or excusable neglect under Rule 60[(b)(1)]." Byrer v. A. B. Robbs Tr. Co., 105 Ariz. 457, 458 (1970). It also encompasses motions "to vacate the judgment and be granted a new trial under Rule 59(a) and [(f)] on the grounds of excessive damages, or to alter or amend the judgment under Rule 59[(d)]."⁴ Id. Relevant here, Rule 55(c) provides that "[t]he court may set aside an entry of default for good cause, and it may set aside a final default judgment under Rule 60(b)."

In this case, Baldry filed a petition to set aside the Hales' application for entry of default but did not file a motion under Rule 55(c) after the superior court entered the default judgment. In Byrer, the defendants likewise moved to set aside the entry of default under Rule 55(c) but they did not move to set aside the default judgment under that rule after default judgment was entered. 105 Ariz. at 457-58. Our supreme court affirmed the judgment on appeal, concluding that the superior court

"should have been affor[]ded the opportunity to reconsider the matter on its merits by presentation of an appropriate motion." Id. at 458. Contrary to Baldry's assertion in his opening brief, he did not file a motion in the superior court to set aside the default judgment under Rule 60(b) as Rule 55(c) provides. Because Baldry did not seek relief on Rule 60 grounds, his arguments that the court erred by refusing to set aside the entry of default and the default judgment are waived and we decline to consider them for the first time on appeal. See Odom v. Farmers Ins. Co. of Ariz., 216 Ariz. 530, ¶ 18 (App. 2007) ("[A]rguments raised for the first time on appeal are untimely and deemed waived."). Even if Baldry had properly filed a Rule 60(b) motion pursuant to Rule 55(c), "[t]he scope of an appeal

5

from a denial of a Rule 60 motion is restricted to the questions raised by the motion to set aside and does not extend to a review of whether the [superior] court was substantively correct in entering the judgment from which relief was sought." Hirsch v. Nat'l Van Lines, Inc., 136 Ariz. 304, 311 (1983). This restriction includes "substantive issues regarding the amount of damages." Id. at 312.

II. Denial of Rule 59 Motion

Baldry argues the superior court's "damages award is not supported by competent evidence" and the court "improperly attributed damages without distinguishing between legally distinct entities." He maintains the court abused its discretion by excluding relevant evidence

"concerning alternative agreements, mitigation, offsets, commissions, and related communications." We review the court's rulings regarding the admission or exclusion of evidence for an abuse of discretion. Waddell v. Titan Ins. Co., Inc., 207 Ariz. 529, ¶ 28 (App. 2004). And we will not disturb the court's rulings unless Baldry can establish both an abuse of discretion and prejudice. See Gemstar Ltd. v. Ernst & Young, 185 Ariz. 493, 506 (1996). The Hales argue that Baldry has shown neither an abuse of discretion nor prejudice. They contend that "Baldry['s] argument on the exclusion of evidence is not supported by adequate explanation, authority, and/or citations to the record." And they maintain that "[t]his failure to properly explain [himself] means that this argument is waived." We agree. The record shows that the superior court conducted a default judgment hearing over two days, at which Donald Hales and Dallas Baldry were both sworn and presumably testified. The court stated that the hearings were "limited by law to Plaintiffs' claimed damages arising from Defendants' breach (judicially admitted as a consequence of Defendants' default) of a promissory note and guaranty." In addition to the parties' testimony, eight exhibits were admitted into evidence, and Baldry and the Hales' attorney presented closing arguments. In making its ruling, the court noted that it had considered "the testimony and other evidence presented at the hearings . . . and the credibility of the witnesses testifying at those hearings." The court further noted that Baldry had "objected to the calculation of Plaintiffs' damages" and, in doing so, "also made arguments beyond the scope of a damages hearing pursuant to Ariz. R. Civ. P. 55(b)(2), including citing to other purported agreements not mentioned in [Plaintiffs'] complaint and attempting to provide proof of affirmative defenses such as unclean hands and mitigation of damages."

6

Baldry has failed to provide us with a certified transcript of the default hearing as required by Rule 11(b)(1), Ariz. R. Civ. App. P. As the appellant, it was his "responsibility to include in the record on appeal"

all transcripts of any proceedings he deems necessary to his appellate claims. In re 6757 S. Burcham Ave., 204 Ariz. 401, ¶ 11 (App. 2003); see also Ariz. R. Civ. App. P. 11(c)(1)(B) (if appellant contends judgment "is unsupported by the evidence" on appeal, mandatory duty to order transcripts of "all proceedings containing evidence relevant to that judgment" invoked). "We may only consider the matters in the record before us. As to matters not in our record, we presume that the record before the [superior] court supported its decision." Ashton-Blair v. Merrill, 187 Ariz. 315, 317 (App. 1996). Accordingly, we must presume the missing transcript supports the court's findings. See Baker v. Baker, 183 Ariz. 70, 73 (App. 1995). Based on that assumption, we cannot say the court abused its discretion. Although Baldry is self-represented, "[c]ourts hold unrepresented litigants in Arizona to the same standards as attorneys and do not afford them special leniency." Ramos v. Nichols, 252 Ariz. 519, ¶ 8 (App. 2022).

III. The Award of Attorney Fees by the Superior Court

Baldry argues the superior court's award of attorney fees was improper because they "were awarded in a default posture without meaningful scrutiny of reasonableness or proportionality." And he contends that "[b]ecause the underlying judgment and damages award were entered in error, the attorney's fee award should be vacated." We review the court's decision on the amount of attorney fees to award for an abuse of discretion. Modular Mining Sys., Inc. v. Jigsaw Techs., Inc., 221 Ariz. 515, ¶ 21 (App. 2009).

Baldry's argument consists entirely of conclusory statements unsupported by citations to the record or citations to relevant legal authority. His argument thus does not comply with our rules of civil appellate procedure, which require an appellant's arguments to include

"supporting reasons for each contention," "citations of legal authorities and appropriate references to the portions of the record on which the appellant relies," "references to the record on appeal where the particular issue was raised and ruled on, and the applicable standard of appellate review." Ariz. R. Civ. App. P. 13(a)(7). Given these deficiencies, we deem his argument waived. See Ramos, 252 Ariz. 519, ¶¶ 8-9.

7

Attorney Fees on Appeal

Both parties request attorney fees on appeal pursuant to A.R.S. § 12-341.01, which authorizes an award of fees to the successful party in a contract action. Because Baldry is self-represented, he is not entitled to attorney fees even if he were the prevailing party. See Munger Chadwick, P.L.C. v. Farwest Dev. & Constr. of the Sw., LLC, 235 Ariz. 125, ¶ 5 (App. 2014) (self-represented party not entitled to recover attorney fees). The Hales are the prevailing party on appeal and have also requested an award of attorney fees pursuant to the terms of the promissory note and personal guaranty, providing for an award of attorney fees. The Hales are entitled to recover their reasonable fees under the express terms of the promissory note and guaranty. See, e.g., Grubb & Ellis Mgmt. Servs., Inc. v. 407417 B.C., L.L.C., 213 Ariz. 83, ¶¶ 25-26 (App. 2006). We therefore award the Hales their reasonable attorney fees and their taxable costs upon compliance with Rule 21, Ariz. R. Civ. App. P.

Conclusion

For the foregoing reasons, we affirm.