JOSEPHINE LINKER HART, JUDGE:
Affirmed. Vaught, C.J., and Pittman, J., agree.
service of process for Harrah's Entertainment, Inc.
The circuit court granted Harrah's petition for certiorari and set aside the default judgment.
Harrah's also contends that Ms. Wosnack is not even an employee of Harrah's Entertainment, Inc., but an employee of Harrah's Operating Co., Inc. We find this argument disingenuous as this statement directly contradicts Ms. Wosnack's representations made in a letter sent to Mr. Searle in which she represents that she is legal counsel for Harrah's Entertainment, Inc.'s Eastern Division and the letter was printed on Harrah's Entertainment, Inc. letterhead.
We agree that the service of process upon Ms. Wosnack, which was signed for by a mailroom clerk, was likely improper under the current Tennessee Rules of Civil Procedure, as discussed at length in our Supreme Court's recent opinion in Hall v. Haynes, — S.W.3d —, No. W2007-02611-SC-R11-CV, 2010 WL 3360115 (Tenn. Aug. 26, 2010).
On August 28, 2002, the circuit court ordered the attorney of record for Harrah's to accept service of process on behalf of Harrah's. While the trial court did not explicitly state it, Tenn. R. Civ. P. Rule 4.09 permits a trial court to permit the amendment of service of process "[a]t any time in its discretion and upon such terms as it deems just . . . unless it clearly appears that material prejudice would result to the substantial rights of the party against whom the process issued."
An Amended Complaint was served on Harrah's on May 12, 2008. One month later, on June 10, 2008, Harrah's filed an Answer to the amended complaint. Harrah's did not raise the issue of the sufficiency of the second attempt at service of process in the Answer to the Amended Complaint or at anytime in the trial court. On appeal, however, Harrah's contends that service of process was not sufficient.
Prior to that, the plaintiff mailed an improperly amended complaint to Harrah's counsel on September 30, 2002; however, the plaintiff had not obtained leave to amend the complaint. Leave was subsequently obtained and a second amended complaint was then served on counsel.
Harrah's filed a Motion for Summary Judgment in August 2007, which also did not raise the issue of improper service of process.
Service of process was attempted twice; once while the case was pending in general sessions court and a second time while the case was pending in circuit court. Harrah's properly raised the issue of the sufficiency of the first attempt at service of process and succeeded in getting the default judgment set aside. Harrah's, however, did not challenge the sufficiency of process concerning the second time process was served on Harrah's, while the case was pending in the circuit court.
Tennessee Rule of Civil Procedure 12.02 provides:
Every defense, in law or fact, to a claim for relief in any pleading . . . shall be asserted in the responsive pleading thereto if one is required, except that the following defenses may at the option of the pleader be made by motion in writing: . . . insufficiency of process, . . . insufficiency of service of process. . . . A motion making any of these defenses shall be made before pleading if a further pleading is permitted.
The Tennessee Rules of Civil Procedure go on to state that a party "waives all defenses and objections which the party does not present either by motion as hereinbefore provided, or, if the party has made no motion, in the party's answer or reply, or any amendments thereto, . . ." Tenn. R. Civ. P. 12.08. Harrah's did not raise the issue pursuant to Tenn. R. Civ. P. Rule 12.02 in its August 2007, Motion for Summary Judgment or in its Answer to the Amended Complaint, which it filed on June 10, 2008. By failing to do so, Harrah's waived the issue. Tenn. R. Civ. P. 12.08; Toler v. City of Cookeville, 952 S.W.2d 831, 835 (Tenn. Ct. App. 1997) (stating insufficient service of process is an affirmative defense, which must be asserted in a responsive pleading, or it is waived).
The defenses of insufficiency of process and insufficiency of service of process cannot be raised by amendment. Tenn. R. Civ. P. 12.08.
Having addressed the procedural issues raised by Harrah's, we now turn to the issues that pertain to the trial of this case.
STANDARD OF REVIEW
A bench trial was held on this matter following which the trial court issued its findings. Our standard of review of a trial court's findings of fact is de novo, and we presume that the findings of fact are correct unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Rawlings v. John Hancock Mut. Life Ins. Co., 78 S.W.3d 291, 296 (Tenn. Ct. App. 2001). For the evidence to preponderate against a trial court's finding of fact, it must support another finding of fact with greater convincing effect. Id.; see also The Realty Shop, Inc. v. R.R. Westminster Holding, Inc., 7 S.W.3d 581, 596 (Tenn. Ct. App. 1999). Where the trial court does not make findings of fact, there is no presumption of correctness, and "we must conduct our own independent review of the record to determine where the preponderance of the evidence lies." Brooks v. Brooks, 992 S.W.2d 403, 405 (Tenn. 1999). We also give great weight to a trial court's determinations of credibility of witnesses. Estate of Walton v. Young, 950 S.W.2d 956, 959 (Tenn. 1997); B G Constr., Inc. v. Polk, 37 S.W.3d 462, 465 (Tenn. Ct. App. 2000). Issues of law are reviewed de novo with no presumption of correctness. Nelson v. Wal-Mart Stores, Inc., 8 S.W.3d 625, 628 (Tenn. 1999).
NEGLIGENCE
Harrah's contends the trial court erred in finding it was negligent. It asserts the evidence was insufficient to establish it failed to use ordinary or reasonable care. Harrah's also asserts that Mr. Searle's damages were caused by FirstStar.
A claim for negligence must establish the following elements: (1) a duty of care owed by the defendant to the plaintiff; (2) conduct by the defendant falling below the applicable standard of care that amounts to a breach of that duty; (3) an injury or loss; (4) causation in fact; and (5) proximate, or legal, causation. Staples v. CBL Assocs., 15 S.W.3d 83, 89 (Tenn. 2000) (citing White v. Lawrence, 975 S.W.2d 525, 529 (Tenn. 1998); McCall v. Wilder, 913 S.W.2d 150, 153 (Tenn. 1995)). Each element must be proven by the plaintiff by a preponderance of the evidence. Hale v. Ostrow, 166 S.W.3d 713, 718 (Tenn. 2005) (citing Kilpatrick v. Bryant, 868 S.W.2d 594, 598 (Tenn. 1993)).
The record reveals that Mr. Searle's $500 check cleared Harrah's bank, FirstStar, on December 18, 2001, five weeks prior to the commencement of collection efforts by Harrah's, which began on January 23, 2002. The record also reveals that Harrah's never received the original of Mr. Searle's $500 check from its bank, which is customary when a check is dishonored. The trial court found that Harrah's "should have been on notice that something was amiss, at least, when [Harrah's] was given a photocopy of [Mr. Searle's] check instead of the original, which triggered a duty for [Harrah's] to be certain that the check had not already been paid before commencing collection procedures against Mr. Searle." After considering these and other relevant facts, we have determined the evidence does not preponderate against the trial court's findings that Harrah's failed to exercise ordinary and reasonable care; thus, Harrah's breached its duty of reasonable care by failing to investigate further when it received only a photocopy of Mr. Searle's check.
Harrah's also contends that Mr. Searle and FirstStar were negligent and that their negligence was a cause of Mr. Searle's damages. The trial court did not allocate any fault to Mr. Searle or FirstStar and the evidence cited to by the parties in their briefs does not preponderate against this decision. We, therefore, affirm the trial court's finding that Harrah's was negligent and that 100% of the fault was attributable to Harrah's.
We also note that Harrah's makes no citations to the record in its argument section. Tenn. R. App. P. 27(a)(7) requires an appellant to make citations to the record in support of its argument. Our courts have consistently held that "the failure to make appropriate references to the record and to cite relevant authority in the argument section of the brief as required by Rule 27(a)(7) constitutes a waiver of the issue." Bean v. Bean, 40 S.W.3d 52, 55-56 (Tenn. Ct. App. 2000) (citing State v. Schaller, 975 S.W.2d 313, 318 (Tenn. Crim. App. 1997); Rampy v. ICI Acrylics, Inc., 898 S.W.2d 196, 210 (Tenn. Ct. App. 1994); State v. Dickerson, 885 S.W.2d 90, 93 (Tenn. Crim. App. 1993)). It is not the duty of this court to verify unsupported allegations or search the record for facts in support of an appellant's poorly argued issues. See id. (citing Duchow v. Whalen, 872 S.W.2d 692, 693 (Tenn. Ct. App. 1993)).
EXTORTION AND COERCION
Harrah's contends that the trial court erred in finding its collection activities constituted extortion. Harrah's contends that there is no evidence of extortion or coercion, that it was acting under the "good faith belief" that it was collecting on a dishonored check, and that damages for civil extortion and coercion pursuant to the criminal statutes are inappropriate and should not be allowed by the court.
A person commits extortion when a person uses "coercion" upon another person with the intent to obtain property or services. Tenn. Code Ann. § 39-14-112(a). Coercion is defined in Tenn. Code Ann. § 39-11-106(c)(3)(B) as a threat communicated to "wrongfully accuse any person of any offense."
Mr. Searle testified that he received threatening phone calls regarding the $500 check and during one of the phone calls the caller informed him that a warrant had been taken out for his arrest. In one of the letters sent to Mr. Searle on Harrah's letterhead, the collection agent for Harrah's stated that a returned check was a deceptive practice, which was a Class 4 felony under Illinois criminal statutes. Based on these and other relevant facts, the trial court found that Harrah's committed extortion by means of verbal threats. The court further stated it was persuaded that Harrah's had made serious verbal threats due to "the extreme action of Mr. and Mrs. Searle in driving to Illinois on a Sunday afternoon to pay the money that had been demanded when the proof showed that they [the Searles] were normally lackadaisical about their financial affairs." The evidence in the record does not preponderate against the trial court's findings that Harrah's committed extortion; thus, we affirm the trial court's finding on this issue.
As for Harrah's assertion that damages for civil extortion and coercion pursuant to the criminal code are inappropriate and should not be allowed, we note that the trial court did not award any damages for extortion. Thus, this issue is moot. The trial court merely took into account the coercive collection activities of Harrah's, which the trial court found to constitute extortion, to conclude that Harrah's intentionally inflicted emotional distress on Mr. Searle.
INTENTIONAL INFLICTION OF EMOTIONAL DISTRESS
The trial court found that Harrah's conduct was intentional and "so outrageous in character and so extreme in degree as to go beyond all bounds of decency," and that its actions resulted in "serious mental injury" to Mr. Searle. Harrah's contends this was error.
The three essential elements to a cause of action for intentional infliction of emotional distress are: (1) the conduct complained of must be intentional or reckless; (2) the conduct must be so outrageous that it is not tolerated by civilized society; and (3) the conduct complained of must result in serious mental injury. Bain v. Wells, 936 S.W.2d 618, 622 (Tenn. 1997) (citing Medlin v. Allied Inv. Co., 398 S.W.2d 270, 274 (Tenn. 1966); Johnson v. Woman's Hospital, 527 S.W.2d 133, 144 (Tenn. Ct. App. 1975)).
Mr. Searle introduced into evidence two collection letters sent to him by Harrah's weeks after his check cleared the bank. He also testified about the threatening phone calls he received from a Harrah's employee. While Harrah's contends the letters are the only collection efforts conclusively proven, thus insisting that the phone calls did not occur, the trial court clearly resolved all factual disputes in favor of Mr. Searle. Moreover, the evidence introduced by Mr. Searle sufficiently established the elements of intentional or reckless conduct by Harrah's employees or agents. Mr. Searle testified that, in one of the phone calls, Kristina Thorsby told him she was in possession of the original check, which could not have been true, and that a warrant for his arrest had been issued in Davidson County, which was also not true.
The second essential element of intentional infliction of emotional distress is conduct that is "so outrageous that it is not tolerated by civilized society." The trial court made the finding that Harrah's conduct would have constituted extortion, which is a type of conduct our society does not tolerate.
While Harrah's contends the trial court made no factual findings regarding the claim of intentional infliction of emotional distress, thus making our review de novo with no presumption of correctness, we cannot agree. The trial court made specific findings regarding the claim of extortion, and such factual findings directly relate to the claim of intentional infliction of emotional distress. It is not necessary for a trial court to repeat itself, once it has made the factual findings and those findings relate to other claims, that is sufficient for a de novo review with a presumption of correctness as to those findings.
Our Supreme Court has found the use of improper methods in attempting to collect an erroneous debt supported a claim for intentional infliction of emotional distress. Moorehead v. J.C. Penney, 555 S.W.2d 713, 717 (Tenn. 1977). Harrah's contends Moorehead is distinguishable because in Moorehead, the department store sent numerous letters to the plaintiffs in the action over an extended period of time concerning a very modest debt. Id. at 714-16. We acknowledge that the actions of the creditor in Moorehead were more egregious and protracted than those of Harrah's, however, we do not believe Moorehead represents the minimum standard for outrageous conduct.
In the case at bar, we find it significant that Mr. Searle's $500 check had cleared Harrah's bank weeks before Harrah's initiated collection efforts and that Harrah's used improper methods to collect an erroneous debt by intentionally misrepresenting that it had the original check in its possession during one of the phone calls and representing falsely that a warrant had been taken out for Mr. Searle's arrest and that he would be arrested if he did not pay the debt immediately. As our Supreme Court commented in Moorehead:
[C]ertain tactics employed by creditors in attempts to collect alleged debts have been held to be actionable . . ."especially where the circumstances attending the effort to collect the claim are such as to invoke the general rule that one who wilfully or intentionally causes great emotional distress, without justification, is liable for such injuries."
Id. at 717-18 (citations omitted). Such is the case here.
For its final argument on this issue, Harrah's contends the evidence does not support a finding of emotional distress because the only evidence of serious mental injury was the testimony of Mr. Searle and his son. We find this contention without merit. Serious mental injury may be established by the testimony of the plaintiff as well as "the testimony of other lay witnesses familiar with the claimant." Miller v. Willbanks, 8 S.W.3d 607, 615 (Tenn. 1999) (citing Uebelacker v. Cincom Sys., Inc., 549 N.E.2d 1210, 1220 (Ohio Ct. App. 1988); Peery v. Hanley, 897 P.2d 1189, 1191 (Or. Ct. App. 1995)). Moreover, expert testimony is not required to establish serious mental injury. Id.
Mr. Searle testified to the anxiety, fear, and insomnia he experienced due to the phone calls from Harrah's. His son testified that his father's behavior drastically changed following the phone calls and that his father was stressed and nervous. He also testified how his father rearranged the furniture in their home so that he could look out the window to see if police were coming to arrest him. Mr. Searle's wife testified her husband was very upset about the prospect of going to jail and he was concerned about not having anyone to care for him and not being able to take his medicine to prison should he be arrested. Evidence of insomnia or depression may support a finding of serious mental injury for a claim of intentional infliction of emotional distress. Id. (citing Medlin, 398 S.W.2d at 272; Johnson, 527 S.W.2d at 140).
Based upon our review of the evidence in the record and the applicable legal principles, we affirm the trial court's finding that Harrah's conduct constituted intentional infliction of emotional distress.
TENNESSEE CONSUMER PROTECTION ACT
Harrah's contends the trial court erred in finding it violated the Tennessee Consumer Protection Act because, it contends, the transaction did not fit within the definition of "trade, commerce or a consumer transaction" under Tenn. Code Ann. § 47-18-103. Therefore, Harrah's asserts, the Tennessee Consumer Protection Act is inapplicable. We disagree.
Tenn. Code Ann. § 47-18-104(b)(27) prohibits "[e]ngaging in any other act or practice which is deceptive to the consumer or to any other person." The trial court made the following findings regarding the TCPA claim:
The court finds that [Harrah's] was deceptive in representing to [Mr. Searle] that it had a remedy it did not have, in particular, that a warrant was outstanding in Davidson County for Mr. Searle's arrest, and that it had possession of the check Mr. Searle had written in Harrah's Metropolis Casino on October 27, 2001. Furthermore, [Harrah's] was deceptive in characterizing Mr. Searle as being in violation of an Illinois felony criminal statute.
The trial court also found that Harrah's violation of the Act was willful and knowing, and, thus awarded Mr. Searle treble damages and his attorney's fees.
Harrah's relies upon Pursell v. First Am. Nat'l Bank, 937 S.W.2d 838 (Tenn. 1996), to assert that the TCPA does not apply to the facts of this case; however, we find Pursell distinguishable. In Pursell, the plaintiff filed a TCPA claim against a bank based upon the bank's efforts to repossess collateral that secured a loan. Id. at 842. The Court held that the transaction at issue did not fall within the TCPA definition of "trade or commerce."
The terms "trade or commerce" are specifically defined to limit the Act's application. The actions of the Bank and its agent, even if considered to be unfair or deceptive, did not affect the "advertising, offering for sale, lease or rental, or distribution of any goods, services, or property, tangible or intangible, real, personal, or mixed, and other articles, commodities, or things of value wherever situated." Pursell's allegations, if taken as true, establishes
only that the defendants breached an agreement to return to him his own property.
Id. at 841. The Supreme Court also noted that its holding was "confined to the facts and circumstances of this case."
Id. at 842.
The transaction at issue here, however, clearly involves trade, commerce, and a consumer transaction. Mr. Searle went to Harrah's casino to gamble, which is Harrah's trade, and Harrah's provided cash to Mr. Searle, in exchange for his $500 check, so that Mr. Searle could engage in Harrah's trade — to gamble in Harrah's casino. The efforts of Harrah's to collect the erroneous debt was a continuation of the consumer transaction.
Having determined the transaction falls within the TCPA, we must now determine whether Harrah's engaged in deceptive practices in violation of the TCPA. In one of the letters Harrah's sent to Mr. Searle, Harrah's erroneously represented that he was in violation of an Illinois criminal statute. Additionally, as Mr. Searle testified, the woman who called him from Harrah's told him that she was in possession of the dishonored check, that there was a warrant for his arrest, and that criminal charges were brought against him. However, Harrah's was not in possession of the original check, the check had cleared Harrah's bank, and there was no warrant for his arrest. Furthermore, the check was dishonored only once and a check must be dishonored twice to give rise to a criminal violation. 720 Ill. Comp. Stat. 5/17-1 (2010). Threatening criminal prosecution to collect a debt constitutes deceptive practices under the TCPA, as the trial court correctly found. See Turner v. E-Z Check Cashing, Inc., 35 F. Supp. 2d 1042, 1052 (M.D. Tenn. 1999) (finding a check cashing company's threat of criminal prosecution against the plaintiff whose check was dishonored constituted a deceptive act under the TCPA). Thus, we affirm the trial court's finding that Harrah's violated Tenn. Code Ann. § 47-19-104(b)(27).
The trial court also found that Harrah's violation of the Act was willful and knowing and awarded Mr. Searle treble damages and his attorney's fees.
TREBLE DAMAGES
Harrah's contends the trial court erred in calculating the treble damages awarded to Mr. Searle by including the $5,000 awarded to Mr. Searle for Harrah's intentional infliction of emotional distress. We agree.
Only actual damages may be trebled under the TCPA, Tenn. Code Ann. § 47-18-109(a)(2)-(3), and damages awarded for emotional distress do not constitute actual damages. Thus, they are not subject to the treble provision of the TCPA. Accordingly, we reverse the trial court's computation of treble damages and remand for the trial court to recalculate the award without including the $5,000 award for emotional distress.
ATTORNEY'S FEES
Because the trial court correctly found that Harrah's violation of the Act was willful and knowing, Mr. Searle was entitled to recover his reasonable and necessary attorney's fees. We affirm the award of attorney's fees incurred in the trial court and remand for the trial court to make an award of attorney fees that Mr. Searle incurred on appeal.
COMPENSATORY DAMAGES PUNITIVE DAMAGES
For his part, Mr. Searle contends the trial court did not award adequate compensatory damages; he claims that a "fair sum to compensate" him would be $250,000. He also contends the trial court erred in failing to award punitive damages.
On appeal, Mr. Searle also raised the issue of the trial court's admission of Exhibit 25 as a business document under Tenn. R. Evid. 803(6). As we are affirming the trial court's findings as to all of Mr. Searle's claims against Harrah's, we find this issue moot.
The amount of damages awarded by a trial court is a question of fact. Moody v. Lea, 83 S.W.3d 745, 751 (Tenn. Ct. App. 2001) (citing Beaty v. McGraw, 15 S.W.3d 819, 829 (Tenn. Ct. App. 1998)). We review the amount of damages awarded in a bench trial with the presumption that the trial court is correct, and we will alter the amount of damages "only when the trial court has adopted the wrong measure of damages or when the evidence preponderates against the amount of damages awarded." Id. (citing Beaty, 15 S.W.3d at 829). The evidence in this record does not preponderate against the trial court's award of compensatory damages. Accordingly, we affirm.
As for Mr. Searle's claim that the trial court should have awarded him punitive damages, Mr. Searle made an election of remedies by electing to receive treble damages under the TCPA; thus, he is not entitled to punitive damages. See Miller v. United AutoMax, 166 S.W.3d 692, 697 (Tenn. 2005).
IN CONCLUSION
The judgment of the trial court is affirmed in part and reversed in part, and this matter is remanded for further proceedings consistent with this opinion. Costs of appeal are assessed against Harrah's Entertainment, Inc.