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Replies to post #79276 on Hiru Corporation (HIRU)
(b) Grounds for Relief from a Final Judgment, Order, or Proceeding. On motion and just terms, the court may relieve a party or its legal representative from a final judgment, order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable neglect;
(2) newly discovered evidence that, with reasonable diligence, could not have been discovered in time to move for a new trial under Rule 59(b)(1);
(3) fraud (whether previously called intrinsic or extrinsic), misrepresentation, or other misconduct of an opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged; it is based on an earlier judgment that has been reversed or vacated; or applying it prospectively is no longer equitable; or
(6) any other reason justifying relief.
Additionally, a dedicated legal team has been engaged to protect the company's interests and reputation, including addressing actions stemming from the prior ownership and management.
B. HIRU Has Meritorious Defenses (Already Recognized by the Court)
1. Unauthorized signature/lack of authority (UCC § 3-403 principles).
The Court previously found HIRU had a meritorious defense when it set aside default. Ex. C.
Initial Disclosures (Oct. 2024) identify witnesses and facts showing Joel Natario was never an officer/director, had no board authorization to sign checks, and admitted he signed Gavin’s name on the six checks drawn on HIRU’s Chase account. Ex. P (Initial Disclosures).
Board records confirm the authority changes in October 2023 (Gavin out; Vasiljevic in) and July 2024 (Al-Thani/Thorp installed), defeating any apparent authority theory tied to Gavin/Natario in 2024–2025. Exs. L–M.
Pending before this Court is Defendant Hiru Corporation’s (Hiru) Motion to Set Aside Entry of Default filed on January 25, 2024. The Motion has been fully briefed. An entry of default maybe set aside for good cause. 55 (c), Ariz. R. Civ. P. For the reasons set forth in this minute entry, the Court finds good cause exists to set aside the entry of default as to Hiru. The First Amended Complaint was not served on Hiru’s Statutory Agent. The First Amended Complaint was served on Kathryn Gavin (Gavin) on behalf of Hiru on October 24, 2023. Gavin resigned from Hiru on October 16, 2023, and was not authorized to accept service on behalf of Hiru. Her failure to disclose this and her failure to forward the paperwork to Hiru’s new management is not the fault of Hiru. Gavin is a codefendant who herself has failed to respond to the lawsuit and a Default Judgment has been entered against her. Her apparent failure to take this lawsuit seriously should not be imputed to Hiru. Secondly, the Application for Entry of Default was also served on Gavin on November 16, 2023. By this time, Hiru’s new officers, directors and the corporate address in Florida was of record with the Georgia Secretary of State.
Secondly, Defendant has shown each of the following elements that satisfy the requirement for setting aside entry of default. Specifically, Defendant (1) acted promptly in seeking relief from the entry of default; (2) that its failure to timely answer was due to excusable neglect; and (3) that Defendant has a meritorious defense. Richas v. Superior Crt. of Ariz. in and for Maricopa Cty., 133 Ariz. 512, 652 P.2d 1035 (1982).
Therefore,
IT IS ORDERED granting Defendant’s Motion to Set Aside Entry of Default.
PLAINTIFF AMERICA FIRST CREDIT
UNION’S OPPOSITION TO HIRU
CORPORATION’S MOTION FOR RELIEF
FROM JUDGMENT UNDER ARIZ. R. CIV.
P. 60(b)(1) & (6) AND 60(c)
Case No. CV2023-012400
(Tier 2)
(Assigned to The Honorable Erik Thorson)
IN THE SUPERIOR COURT OF THE STATE OF ARIZONA
IN AND FOR THE COUNTY OF MARICOPA
AMERICA FIRST CREDIT UNION, a federally
chartered credit union,
Plaintiff,
v.
JOEL NATARIO AND JANE DOE
NATARIO, as husband and wife; KATHRYN
GAVIN AND JOHN DOE GAVIN, as husband
and wife; HIRU CORPORATION, a Georgia
corporation; AZ CUSTOM BOTTLED
WATER LLC, a Nevada limited liability
company; SALOME WATER AND ICE LLC,
a Nevada limited liability company; ABC
ORGANIZATIONS I-X; JOHN DOES 1-3; and
JANE DOES 4-6,
Defendants.
Plaintiff America First Credit Union opposes HIRU Corporation’s Motion for Relief from
Judgment under Ariz. R. Civ. P. 60(b)(1) & (6) and 60(c) (the “Motion”) as follows:
Introduction
America First filed this lawsuit just over two years ago. Initially, it seemed that HIRU would
not defend itself, and the Court entered default against HIRU. However, when HIRU learned of the
default, it engaged counsel, appeared in the lawsuit and successfully moved to have the default set
aside because it had not been properly served. HIRU then went about defending itself, serving its
initial disclosures, responding to discovery requests, engaging in expert discovery—including
retaining an expert and issuing that expert’s report—and appearing with counsel at a 30(b)(6)
deposition. And then? HIRU simply stopped actively participating in the case.
In March 2025, HIRU’s counsel moved to withdraw, and HIRU failed to present its expert
witness for deposition. Shortly afterward, America First filed its Combined Motion for Summary
Judgment and for Sanctions under Ariz. R. Civ. P. 37 against Defendant HIRU Corporation (the
“Summary Judgment Motion”). HIRU admits that its counsel asked HIRU’s leadership whether he
should seek an extension of time to respond to the Summary Judgment Motion, but it seems that
HIRU never responded to that question. Instead, the Court allowed HIRU’s counsel to withdraw
about a month after America First filed its Summary Judgment Motion. HIRU did not retain new
counsel and did not respond to the Summary Judgment Motion. The Court waited two more months
and then granted the Summary Judgment Motion in July 2025. The Court entered judgment against
HIRU two months after that on September 9, 2025.
Now, HIRU asks the Court to set aside the judgment, saying that it resulted from HIRU’s
“excusable neglect” of the case and from “extraordinary circumstances.” But there are no
extraordinary circumstances, and HIRU’s explanation for its neglect of the case—that new
management didn’t understand the litigation—contradicts the timeline of the case. HIRU’s new
management took over in July 2024, and all the fact and expert discovery in the case—which HIRU
actively participated in—took place after July 2024: HIRU responded to discovery requests in
September 2024, served its initial disclosures in October 2024—which spelled out its factual and
legal defenses—served its expert report in October 2024, and appeared with counsel at a 30(b)(6)
deposition in February 2025. It’s only at the end of March 2025—eight months after HIRU’s “new”
management was put in place—that HIRU stopped participating in the case. That is not “excusable
neglect.” It’s mere neglect, carelessness, or apathy that does not justify setting aside the judgment.
The Court should deny the Motion.
Background
I. America First filed suit, and HIRU appeared with counsel to defend itself.
America First filed this lawsuit against HIRU and others in August 2023. See Compl.
HIRU’s CEO, defendant Kathryn Gavin, resigned shortly afterward in October 2023 and was
replaced by Sasa Vasiljevic as “a CEO and the Chairman of the Board of HIRU.” Mot. Ex. L.
Counsel for HIRU appeared in January 2024, and—after persuading the Court to set aside the default
against HIRU—filed HIRU’s answer to America First’s First Amended Complaint in March 2024,
also asserting cross-claims against its co-defendants. See Answer of Def. HIRU Corp. to Pl.’s First
Am. Compl. with Cross-Claims.
II. HIRU and America First exchanged disclosures and engaged in discovery.
HIRU says that its management structure changed in July 2024 when Khalid Nasser A.S. Al-
Thani stepped in as Chairman & CEO, Ian Charles Thorp as COO, and James Peter Thorp as CFO.
See Mot. Ex. M. Soon after, in August 2024, America First issued discovery requests to HIRU. See
Ex. A. HIRU responded in September 2024. See Ex. B. Then, in October 2024, HIRU belatedly
served its initial disclosures together with an expert report. See Mot. Exs. P & Q.
America First noticed depositions in November and December 2024, including a 30(b)(6)
deposition of HIRU, which included matters for examination that related to America First’s claims
against HIRU such as HIRU’s relationship with the other defendants, its organizational structure,
and its defenses to America First’s claims. See Ex. C. HIRU did not object, designating its Chairman
and CEO Al-Thani as its Rule 30(b)(6) witness, and Al-Thani appeared for the deposition with
HIRU’s counsel in February 2025. (See Ex. D at 6:25-7:2. Al-Thani testified that he did “[n]othing”
to prepare to testify on the noticed 30(b)(6) topics, id. at 10:11-13, and admitted that he otherwise
America First retained an expert, Tyler Parker, to rebut HIRU’s expert report and served
Parker’s rebuttal report in December 2024. See Ex. E. America First also noticed the deposition of
HIRU’s expert in March 2025. See Ex. F. Yet again, HIRU did not object to the deposition notice.
Ex. G ¶¶ 2-3. However, two days before the deposition, HIRU’s counsel moved to withdraw from
the case, see Mot. Ex. I, and emailed America First’s counsel: “I am informed that [HIRU’s expert]
Mr. Lindsey will not be appearing for the noticed deposition this week,” Ex. H. In fact, neither Mr.
Lindsey nor HIRU’s counsel appeared at the deposition. See Ex. I.
Following HIRU’s discovery misconduct, America First filed its Combined Motion for
Summary Judgment and for Sanctions under Ariz. R. Civ. P. 37 against Defendant HIRU
Corporation (the “Summary Judgment Motion”) on April 10, 2025. HIRU’s counsel asked HIRU’s
leadership whether he should seek an extension of time to respond to the Summary Judgment
Motion, see Mot. Ex. K, but there is no evidence that HIRU’s leadership ever responded to that
question. With HIRU taking no action, the Court allowed HIRU’s counsel to withdraw about a
month later. See May 5, 2025 Minute Entry. After that, HIRU did not retain new counsel to respond
to the Summary Judgment Motion. The Court waited two more months and then granted America
First’s Motion on July 11, 2025, and entered judgment two months after that on September 9, 2025.
Argument
I. HIRU has not demonstrated grounds for relief from the judgment against it.
HIRU argues that the Court should relieve it from the judgment because of excusable neglect
and extraordinary circumstances. Not so.
A. There are no “extraordinary circumstances” justifying relief under Rule
60(b)(6).
To begin, while HIRU claims that there are “extraordinary circumstances” justifying relief
under Rule 60(b)(6), those are the same “circumstances” it cites to argue excusable neglect under
Rule 60(b)(1). See Mot. at 3:22-4:21. That cannot be the case: “an ‘other’ ground for relief from a
default judgment cannot be one of the reasons set forth in Rule 60(c)(1)-(5)[.]” Gonzalez v. Nguyen,
had “no knowledge related to any of those subject matters,” id. at 17:11-14.
243 Ariz. 531, 534, 414 P.3d 1163, ¶ 12 (2018). Accordingly, HIRU has not demonstrated grounds
for relief from the judgment under Rule 60(b)(6).
B. HIRU’s neglect of the case was not “excusable” under Rule 60(b)(1).
Next, HIRU has neglected this case, but it was not the sort of “excusable neglect” that would
allow the Court to relieve HIRU from judgment under Rule 60(b)(1). “The purpose of the rule is to
provide relief for those mistakes and errors which inevitably occur despite diligent efforts to comply
with the rules.” Maher v. Urman, 211 Ariz. 543, 550, 124 P.3d 770, ¶ 21 (Ct. App. 2005) (quoting
City of Phoenix v. Geyler, 144 Ariz. 323, 332, 697 P.2d 1073, 1082 (1985)). Thus, “[n]eglect is
excusable if it might be the act of a reasonably prudent person under the same circumstances,” id. at
550, ¶ 22 (internal quotations omitted), and “diligence is the final arbiter of whether mistake or
neglect is excusable,” Geyler, 144 Ariz. at 332, 697 P.2d at 1082. Mere neglect, inadvertence, or
forgetfulness will not entitle a party to relief. See Aloia v. Gore, 252 Ariz. 548, 551, 506 P.3d 34,
¶ 11 (App. 2022). Against this standard, HIRU’s neglect was not excusable.
1. HIRU’s “representation gap” did not stem from “excusable neglect.”
HIRU argues that the Court should relieve it from the judgment because of a “representation
gap,” Mot. at 2, following counsel’s withdrawal, which resulted in the Court granting America
First’s Summary Judgment Motion while HIRU was unrepresented. Mot. at 3. But whether HIRU
was represented when the Court decided the Summary Judgment Motion is not the relevant inquiry.
Instead, the Court must determine whether HIRU’s failure to respond to the Summary Judgment
Motion at all before counsel withdrew or to retain new counsel to respond in any way after counsel
withdrew was “the act of a reasonably prudent person under the same circumstances.” Maher, 211
Ariz. at 550, ¶ 22 (internal quotations omitted). It was not.
The timeline here is key: HIRU’s counsel appeared in January 2024 and represented HIRU
throughout the case, including motion practice to set aside the default against HIRU, serving
disclosures, responding to discovery requests, engaging in expert discovery, and defending HIRU’s
30(b)(6) deposition. When America First filed its Summary Judgment Motion on April 10, 2025,
prior counsel still represented HIRU. HIRU did not respond to that Motion, and before the Court
granted HIRU’s counsel request to withdraw on May 5—nearly one month after America First filed
its Summary Judgment Motion—HIRU’s counsel asked HIRU, “Regarding the Motion for Summary
Judgment, do you want me to ask for more time to respond?” Mot. Ex. K. There is no evidence, or
even implication, that HIRU responded to that question. There is also no explanation as to why
HIRU let the “representation gap” occur in the first place. What is clear, though, is that HIRU knew
about the pending Summary Judgment Motion and did nothing about it until almost three months
after the Court ruled on that Motion and almost five months after the Court permitted its counsel to
withdraw. HIRU does not explain why that “representation gap” occurred or provide any facts to
show that it was making “diligent efforts to comply with the rules.” Maher, 211 Ariz. at 550, ¶ 21
(quoting Geyler, 144 Ariz. at 332). There are no facts to show that HIRU acted as “a reasonably
prudent person under the same circumstances.” Id. (internal quotations omitted). Simply put, HIRU’s
“[c]arelessness” in this litigation “does not equate with excusable neglect.” Ulibarri v.
Gerstenberger, 178 Ariz. 151, 163, 871 P.2d 698 (App. 1993).
2. HIRU’s “[c]ontemporary communications” with its counsel leading up to
his withdrawal affirm that HIRU’s neglect of this case was inexcusable.
Next, HIRU points to communications between its leadership and counsel regarding the
litigation. These communications only bolster HIRU’s negligence and offer no excuse for its
decision to ignore the litigation. The cited materials show HIRU’s counsel providing updates and
seeking direction from HIRU with no responses. Again, that is not “the act of a reasonably prudent
person under the same circumstances.” Maher, 211 Ariz. at 550, ¶ 22 (internal quotations omitted).
3. HIRU’s management changes provide no excuse for its conduct.
HIRU points to its change of management to justify its behavior, arguing that “new
management reports they were misled by prior principals about the nature/status of the case,” but the
timeline doesn’t match up. HIRU cites management changes in October 2023 and July 2024. But
HIRU actively litigated the case for months after these management changes—issuing its initial
disclosures, issuing an expert report, responding to written discovery requests, and coordinating
depositions. And, as HIRU itself points out, its counsel was “advising new leadership of the case”
before his withdrawal. Mot. at 4:2-3. Finally, America First didn’t file its Summary Judgment
Motion for nearly nine months after the last of HIRU’s management changes. Whatever impact the
management changes had, there is no indication that they impacted HIRU’s efforts in the litigation.
In sum, HIRU knew what was going on in the litigation as it was represented by counsel
during discovery and when America First filed its Motion for Summary Judgment. For whatever
reason, it ignored its discovery and briefing obligations—not even responding to its counsel’s
suggestion that HIRU seek an extension while seeking new counsel. HIRU did not act like “a
reasonably prudent person under the same circumstances.” Maher, 211 Ariz. at 550, ¶ 22 (internal
quotations omitted). The Court should deny the Motion accordingly.
II. HIRU has not demonstrated that it has meritorious defenses to America First’s claims.
HIRU first argues that defendant Joel Natario improperly acted on HIRU’s behalf. But the
corporate documents HIRU relies on to show that Natario was not connected to HIRU—Exhibits L,
M, and N to the Motion—relate to events that took place months or years after the relevant events.
In addition, when America First sought discovery on those very issues, Al-Thani—HIRU’s 30(b)(6)
witness, Chairman, and CEO—testified on behalf of HIRU that he had “no knowledge related to any
of those subject matters.” Ex. D (Tr. of Khalid Nasser Al-Thani Dep.) at 17:11-14. HIRU doesn’t
point to any new evidence that would allow it to change its position now.
As to HIRU’s argument that its expert provided it with a meritorious defense, HIRU’s expert
failed to appear for a deposition prior to the withdrawal of HIRU’s counsel. HIRU provided—and
now provides—no explanation at all for this failure. HIRU cannot affirmatively refuse to participate
in expert discovery and then argue that it has a meritorious expert defense.
III. There is no reason for the Court to reconsider its decision.
The Court properly disposed of the Summary Judgment Motion. HIRU’s cursory assertion
that the Court’s decision was a “severe” one based “on a non-appearance/non-response record,” Mot.
at 5:20-21, ignores months and months of HIRU’s active participation in the case followed by
HIRU’s unexplained, unilateral decision to ignore the case and its own counsel when America First
moved for dispositive relief. The Court’s decision is properly based on what actually happened:
Despite the assistance of counsel at each major step of the case, HIRU chose to squander its day in
Court. The Court should not allow HIRU to change its mind now when it chose these consequences
in the face of the warnings of its own counsel.
Conclusion
In light of the foregoing, the Court should deny the Motion.
RESPECTFULLY SUBMITTED this 22nd day of October, 2025.
HOLLAND & HART LLP
/s/ Cory A. Talbot
Cory A. Talbot (Arizona Bar No. 020702)
JOHNSON LAW PLLC
Doyle S. Byers (Arizona Bar No. 022374)
Attorneys for Plaintiff America First Credit
Union
THE FOREGOING DOCUMENT was filed with
chambers this 22nd day of October, 2025:
The Honorable Erik Thorson
MARICOPA COUNTY SUPERIOR COURT
East Court Building – 912
101 W. Jefferson Street
Phoenix, AZ 85003-2243
