Background
High Desert Healing leased commercial property from CEC for operation of a medical-marijuana dispensary. After High Desert sought CEC’s consent to assign the lease to its acquiring company, Trulieve, CEC denied consent and purported to terminate the lease. Following a bench trial, the superior court ruled that High Desert had not breached the lease, that CEC had breached its obligation not to unreasonably withhold consent, and that CEC could not evict High Desert.
While CEC’s appeal from that judgment was pending, it continued sending High Desert notices asserting lease breaches. High Desert sought an order to show cause and an injunction. The superior court entered an injunction in April 2024 barring CEC from asserting current or prior lease issues, including alleged building-safety and code violations. CEC later sought Rule 60 relief. The superior court clarified that the injunction reached only issues existing on or before the February 7, 2023 judgment and did not bar CEC from seeking lease-based fees, but otherwise denied relief.
The Court’s Holding
The court affirmed. It held that High Desert properly served CEC’s counsel of record under Rule 5(c)(1), because the earlier judgment had not yet become final after appeal when High Desert filed its show-cause petition. CEC’s attorney remained counsel of record despite a 30-day suspension and had not withdrawn or been replaced by associated counsel.
The court also held that CEC was not entitled to Rule 60 relief for excusable neglect, fraud, or extraordinary circumstances. CEC’s failure to respond resulted from its counsel’s and its own inattention, not excusable neglect. CEC did not establish by clear and convincing evidence that High Desert procured the injunction through fraud, and attorney abandonment and lack of actual notice did not constitute extraordinary hardship warranting relief under Rule 60(b)(6). The court declined to revisit the injunction’s underlying legal correctness because an appeal from denial of Rule 60 relief does not permit that review.
Key Takeaways
- Service on counsel of record was proper while the prior judgment remained pending on appeal.
- A client’s failure to monitor a known-unreliable attorney or secure withdrawal does not establish excusable neglect.
- Rule 60 cannot be used to obtain appellate review of the original injunction’s substantive merits.
Why It Matters
The decision underscores the narrow scope of Rule 60 review and the importance of promptly updating representation in pending litigation. It also confirms that a party seeking to undo an injunction must show a recognized basis for relief, rather than simply argue that the injunction was legally mistaken.