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Sycamore Hills Estates is a residential community governed by an Amended and Restated Declaration of Covenants, Conditions, Restrictions, and Easements (CC&Rs), which created the Sycamore Hills Estates Homeowners Association. Kenneth and Barbara Zablotny, homeowners bound by the CC&Rs, sued the Association in 2015 for allegedly breaching the CC&Rs. The parties settled, signed a written settlement agreement, and stipulated to a form of final judgment that incorporated the settlement by reference. In March 2017 the trial court approved the settlement and entered the stipulated judgment. In May 2019 the Association moved under Ariz. R. Civ. P. 60(b)(4) to set the judgment aside, arguing the court had no jurisdiction ‘to render’ a declaratory approval of relief the pleadings never requested, and that its own agreement to a settlement provision conflicting with the CC&Rs was an ultra vires act. The Court of Appeals, Division Two, affirmed the denial of that motion. It held that a court with general jurisdiction over the underlying contract dispute may enter a consent judgment granting relief beyond the pleadings, and that A.R.S. section 10-3304 bars a nonprofit planned-community association from challenging the validity of its own corporate action for lack of power. Separately, the court held the trial court violated procedural due process by granting the Zablotnys’ supplemental attorney-fee request before the Association’s time to respond had run, and it vacated and remanded that fee award. Neither side wholly prevailed, so the court awarded no fees or costs on appeal.

Reviewing the denial of the Rule 60(b)(4) motion de novo, the court explained that a judgment is void only when the court entering it lacked jurisdiction over the subject matter, over the person, or to render the particular judgment or order entered. The Association relied on Andrews v. Andrews for the proposition that a court’s power is limited by the nature of the suit and the issues raised in the pleadings; in Andrews a dissolution court’s affirmative money judgment on a claim outside the statutory dissolution scheme, and never pleaded as a civil claim, was void. The court assumed without deciding that the judgment’s language approving and incorporating the settlement agreement amounted to a declaratory judgment, and acknowledged that neither party had pleaded for declaratory relief (the settlement did not yet exist when the complaint was filed). It nevertheless held the parties’ stipulation asking the court to enter a judgment approving the settlement supplied the power to grant that relief. Drawing on Industrial Park Corp. v. U.S.I.F. Palo Verde Corp., the court reiterated that provisions of a consent judgment may be sustained and enforced even where the relief was outside the pleadings, so long as the court has general jurisdiction over the matters adjudicated. Because the Association did not contest the trial court’s constitutional and statutory authority to hear the underlying contract action, and because the parties agreed to the relief, the stipulated judgment was valid and not void.

Turning to the ultra vires theory, the court noted the Association had certified in the settlement that its signatories held full corporate authority, yet now argued that section III of the agreement could only be granted by a member vote and could not lawfully benefit the Zablotnys alone. The court held A.R.S. section 10-3304(A) forecloses that argument: the validity of corporate action may not be challenged for lack of power except in the three situations listed in subsection (B). For a planned-community association as defined in A.R.S. section 33-1802, a power-to-act challenge is limited to a proceeding by a member against the corporation to enjoin the act, or a proceeding by the corporation against a current or former director, officer, employee, or agent. The Association was neither a member nor suing an officer or agent; it was attacking its own authority, which the statute does not permit. The court acknowledged the statute could allow an impermissible corporate act to stand, but reasoned that the act is not thereby unchallengeable, only that this Association may not bring the challenge, and affirmed on that alternative ground under Forszt v. Rodriguez. Finally, applying de novo review to the due-process claim, the court calculated that the Association had until September 17, 2019 to respond to the supplemental fee application under Rules 54(g), 7.1, 6, and 5(c), yet the trial court ruled on September 13. Because a party opposing fees is entitled to be heard on their reasonableness (Reed v. Reed), and a later motion for new trial does not cure the deprivation (Morrison v. Shanwick), the premature award violated procedural due process and had to be vacated. The court lacked jurisdiction to review the Rule 59 ruling because it was entered after, and not designated in, the notice of appeal.

For Arizona homeowners associations, this published decision is a strong caution against trying to undo a settlement the association itself negotiated and stipulated to. Once a court with general jurisdiction over a contract dispute enters a consent judgment, that judgment is not void merely because it grants relief the original pleadings never requested; the parties’ stipulation supplies the court’s power to act. Just as importantly, A.R.S. section 10-3304 bars a nonprofit planned-community association from later escaping its own corporate action by calling it ultra vires. The Legislature channeled power-to-act challenges into narrow paths, chiefly a suit by a member to enjoin the act or a suit by the association against its own director, officer, employee, or agent, so a board that agrees to terms it may lack authority to grant cannot simply repudiate the deal by attacking its own authority. Boards should confirm their authority before signing, because the corporate-authority defense will generally not be available to them afterward.

The opinion is equally significant on procedure. Even a party that loses on the merits is entitled to procedural due process on attorney fees, meaning a real opportunity to be heard on the reasonableness and appropriateness of a fee request before the court rules. A trial court that grants a supplemental fee application before the opponent’s response deadline runs commits reversible error, and a later motion for new trial or reconsideration does not cure it. The decision also reminds litigants that a notice of appeal must designate each order challenged, or the appellate court will lack jurisdiction to review it, and that appellate fees under A.R.S. section 12-341.01 may be denied outright where neither side completely prevails.

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