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TENNESSEE DEPT. OF HUMAN SERVICES v. BARBEE

Supreme Court of Tennessee. Western Section, at Jackson.
May 6, 1985
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Case Summary: Tennessee Department of Human Services (assignee of Yvonne Coleman) v. J.B. Barbee

Factual and Procedural Background

This is a paternity action concerning Cedric Jerome Coleman (born February 19, 1970). On October 27, 1977, the Tennessee Department of Human Services, as assignee of Yvonne Coleman, filed a petition to establish paternity against J.B. Barbee. The case was transferred to the Circuit Court for Shelby County.

On October 26, 1979 the case was set in open court for trial on January 23, 1980; no answer had been filed at that time. An answer denying paternity was filed for the defendant on November 26, 1979. Plaintiff's counsel sent letters dated December 11, 1979 advising of a summary judgment motion set for January 11, 1980 and the trial set for January 23, 1980. Defense counsel did not appear at the January 11 hearing; the summary judgment hearing was rescheduled for the morning of January 23. On January 23, 1980 neither defendant nor counsel appeared and the trial court entered a default judgment declaring the defendant to be the father.

On May 2, 1980 the defendant moved to set aside the default judgment, supporting the motion with an affidavit asserting lack of notice and that defense counsel was out of the country. The plaintiff opposed and filed an affidavit from its counsel describing the scheduling and correspondence; plaintiff did not assert prejudice at that time. On May 9, 1980 the trial court granted the motion to set aside the default judgment (the order did not state the court's rationale). Plaintiff sought extraordinary appeals which were denied by the Court of Appeals and this Court in 1980.

A jury trial on September 24, 1981 resulted in a verdict for the defendant. The plaintiff appealed, challenging both the September 24, 1981 trial rulings and the trial court's setting aside of the January 23, 1980 default judgment. The Court of Appeals reversed the trial court and reinstated the default judgment. The present opinion addresses the appeal from that decision.

Legal Issues Presented

  1. Did the trial court abuse its discretion in setting aside the January 23, 1980 default judgment under Rule 55.02 and Rule 60.02 of the Tennessee Rules of Civil Procedure?
  2. Relatedly, whether the circumstances surrounding notice, counsel's absence, and the presence of a meritorious defense justified vacating the default and trying the case on the merits.

Arguments of the Parties

Defendant's Arguments (as reflected in the record)

  • Neither defendant nor defense counsel received notice of the January 23, 1980 trial date; defense counsel was out of the country on that date.
  • Defendant asserted he was not the father (affidavit denying paternity) and therefore had a meritorious defense.
  • Defense counsel later stated he was unaware the case had been set for trial when he left the country and only learned of the default on May 2, 1980.

Plaintiff's Arguments (as reflected in the record)

  • At the May 9, 1980 hearing plaintiff contended the trial court lacked jurisdiction to hear the motion and that defendant had failed to show good cause to set aside the default judgment.
  • At the later September 24, 1981 trial plaintiff claimed prejudice from vacating the default because it could no longer produce two witnesses and had lost letters from the defendant's mother; however, that prejudice was not asserted at the May 9, 1980 hearing when the trial court vacated the default judgment.

Table of Precedents Cited

Precedent Rule or Principle Cited For Application by the Court
Tennessee State Bank v. Lay, Tenn. App., 609 S.W.2d 525 (1980) Burden on movant under Rule 60 to set forth facts and supporting affidavits explaining why movant was justified in failing to avoid the mistake, inadvertence, surprise or neglect. Cited to state the movant's burden when seeking relief under Rule 60; used to evaluate adequacy of defendant's motion and affidavits.
Keck v. Nationwide Systems, Inc., Tenn. App., 499 S.W.2d 266 (1973) Setting aside a default judgment lies within the sound discretion of the trial court. Supported the proposition that the trial court's decision is discretionary and entitled to deference.
Securities and Exchange Commission v. Seaboard Corp., 666 F.2d 414 (9th Cir. 1982) Federal courts construe Rule 60(b) liberally regarding default judgments to favor trial on the merits. Used to justify liberal approach to vacating default judgments so that merits may be considered.
Davis v. Musler, 713 F.2d 907 (2d Cir. 1983) Criteria in default-judgment context for Rule 60(b): (1) whether default was willful; (2) whether defendant has a meritorious defense; (3) prejudice to the non-defaulting party. Adopted as illustrative criteria the trial court should consider when deciding whether to vacate a default judgment.
Thorpe v. Thorpe, 364 F.2d 692 (D.C. Cir. 1966); Wilson v. Moore & Assocs., Inc., 564 F.2d 366 (9th Cir. 1977); United States v. $55,518.05 in U.S. Currency, 728 F.2d 192 (3d Cir. 1984) Additional federal authority applying liberal standards and related criteria in default-judgment contexts under Rule 60. Listed as further authorities consistent with the Davis criteria and liberal approach.
Hopkins v. Hopkins, Tenn., 572 S.W.2d 639 (1978) Illustrates denial of Rule 60 relief where plaintiff failed to show facts justifying extraordinary relief from a final decree entered after a hearing. The Court of Appeals relied on Hopkins to reverse the trial court; this Court distinguished Hopkins because Hopkins involved relief from a final decree after hearing (not a default) and because the trial court here exercised discretion to vacate a default judgment supported by record evidence.
Campbell v. Archer, Tenn., 555 S.W.2d 110 (1977) Trial court abused its discretion in refusing to set aside judgments where defendants showed excusable neglect and lack of prejudice to plaintiff. Used as analogous authority supporting vacating a judgment where defendants were personally free of fault and no prejudice to plaintiff was shown.
Jerkins v. McKinney, Tenn., 533 S.W.2d 275 (1976); Tate v. County of Monroe, Tenn. App., 578 S.W.2d 642 (1979) Support the view that certain procedural lapses (clerk's failure to notify, counsel oversight) can constitute excusable neglect. Cited to show that the clerical and counsel lapses present in this case have been held excusable by Tennessee courts.

Court's Reasoning and Analysis

The Court framed the inquiry as whether the trial court abused its discretion in setting aside the January 23, 1980 default judgment. It began by identifying the governing rules: Rule 55.02 (authorizing setting aside a default for good cause in accordance with Rule 60.02) and Rule 60.02 (listing grounds for relief and procedural limits).

The Court reiterated the movant's burden under Tennessee precedent to present a motion and supporting affidavits explaining why failure to avoid the mistake or neglect was justified. It also acknowledged federal precedent applying Rule 60 liberally in the default-judgment context and adopted the commonly cited criteria (from Davis v. Musler and related authorities) for evaluating such motions: whether the default was willful, whether the defendant has a meritorious defense, and whether the nondefaulting party would be prejudiced by reopening the judgment.

The Court of Appeals had relied on Hopkins v. Hopkins, but the Supreme Court distinguished Hopkins because that case involved relief from a final judgment after a hearing, whereas the present case involved a default judgment and the trial court had exercised its discretion to vacate it. The Court emphasized that the trial court is best positioned to assess the factors relevant to vacating a default and that its factual findings deserve deference.

Applying these principles to the record, the Court found: (1) sufficient evidence explaining why the defendant failed to appear—case was set in open court before defense counsel entered an appearance, no written order of setting was entered, the clerk did not notify defense counsel after the answer was filed, and defense counsel was out of the country; (2) the defendant had a meritorious defense (an answer denying paternity and the defendant's affidavit denying paternity); and (3) the plaintiff had not shown prejudice at the time the trial court vacated the default (plaintiff did not claim prejudice at the May 9, 1980 hearing and later delay in the litigation was attributable to plaintiff's appeals).

On this basis the Court concluded the trial court did not abuse its discretion in vacating the default judgment and ordering the case tried on its merits. The Court also directed that the cause be remanded to the Court of Appeals to address the other issues relating to the September 24, 1981 jury trial that the Court of Appeals had pretermitted.

Holding and Implications

The judgment of the Court of Appeals is reversed and the trial court's decision to vacate the January 23, 1980 default judgment and to try the case on its merits is affirmed.

Implications and direct consequences:

  • The default judgment declaring defendant to be the father was properly vacated and the merits trial was appropriate under the circumstances shown in the record.
  • The cause is remanded to the Court of Appeals to address the issues relating to the September 24, 1981 jury trial that had been pretermitted by that court.
  • Costs are taxed against the plaintiff-appellee and its surety.

The opinion did not announce a new rule of law; it applied existing Tennessee and federal principles governing Rule 60 relief in default-judgment contexts and emphasized deference to the trial court's factual assessment when vacating a default.

Court status: COOPER, C.J., and FONES, HARBISON and DROWOTA, JJ., concur.

Show all summary ...

BROCK, Justice.

This is a paternity action. The focus of the litigation is Yvonne Coleman's son, Cedric Jerome Coleman, who was born on February 19, 1970. On October 27, 1977, the Tennessee Department of Human Services, as an assignee of Yvonne Coleman, filed a petition to establish paternity against J.B. Barbee. This case was subsequently transferred to the Circuit Court for Shelby County, Tennessee.

On October 26, 1979, in open court the case was set for trial on January 23, 1980. At that time no answer had been filed on behalf of the defendant. There is no evidence in the record indicating that plaintiff's counsel attempted to communicate the trial date to the defendant at that time. On November 26, 1979, an answer was filed on behalf of J.B. Barbee by Harvey Yaffe of the Memphis Bar which specifically denied that Mr. Barbee was the father of Cedric Jerome Coleman. On December 11, 1980, the plaintiff's attorney, Harold Horne, wrote a letter to Mr. Yaffe informing him that he had set a motion for summary judgment for hearing on January 11, 1980. Horne wrote a second letter to Yaffe that same day which stated that the case was set for trial on January 23, 1980. With that letter Horne enclosed a set of interrogatories and a set of requests for admission which he had previously attempted to serve upon the defendant. On January 11, 1980, defense counsel failed to appear at the hearing on plaintiff's motion for summary judgment. Mr. Horne rescheduled the hearing on the motion for the morning of trial, January 23, 1980. There is no evidence in the record indicating that Mr. Horne attempted to contact Mr. Yaffe's office: (1) to ascertain why he failed to appear at the January 11, 1980, hearing, (2) to ascertain if Yaffe had received the December 11, 1979, letters and was aware of the dates set for the motion for summary judgment and for trial or (3) to inform him of the rescheduling of the hearing on the motion for summary judgment. On January 23, 1980, neither the defendant, J.B. Barbee, nor his attorney appeared for the trial and the court entered a default judgment decreeing that the defendant was the father of Cedric Jerome Coleman.

On May 2, 1980, a "Motion to Set Aside the Judgment" was filed on behalf of the defendant. The motion states that neither defense counsel nor the defendant received any notice from the clerk's office that the case had been set for trial on January 23, 1980, and that defense counsel was out of the country on the date of trial. In support of this motion, the affidavit of the defendant, J.B. Barbee, was filed with the court which states that he was not the father of Cedric Jerome Coleman; that he had no notice of the January 23, 1980, trial and that his attorney was out of the country at the time the default judgment was taken. The plaintiff vehemently opposed the motion and in support of its opposition, filed the affidavit of Harold Horne, counsel for the plaintiff, with the trial court which explains how the case was set for trial, details the December 11, 1979, correspondence to Mr. Yaffe and the actions which were taken at the January 11 and January 23, 1980, hearings. At this time, the plaintiff did not claim that setting aside the default judgment would result in any prejudice to it.

On May 9, 1980, the trial court heard and granted the motion to set aside the default judgment. The order which sets aside the default judgment does not state the trial court's rationale in so ruling. The plaintiff filed an "Application for an Extraordinary Appeal" in regard to the action taken by the trial court which was denied by the Court of Appeals on June 24, 1980. This Court denied the plaintiff's "Application for an Extraordinary Appeal" on November 7, 1980.

On September 24, 1981, a jury trial was held which resulted in a verdict for the defendant. After the trial court overruled its motion for a new trial, the plaintiff appealed, assigning various errors on the part of the trial court in regard to the September 24, 1981, trial. The plaintiff also appealed the trial court's action in setting aside the January 23, 1980, default judgment.

The Court of Appeals pretermitted the issues which pertain to the September 24, 1981, trial, holding that the trial court erred in setting aside the default judgment:

"Since the defendant failed to show any facts and circumstances to justify the extraordinary relief of setting aside a final judgment, it follows that the judgment of the trial court should be reversed. The jury verdict is to be vacated and the default judgment in favor of the plaintiff is to be reinstated."

In support of his application for permission to appeal to this Court, the defendant filed the affidavit of defense counsel which indicates that he was unaware that his case was set for trial when he left this country in December, 1979, that he was out of the country on January 23, 1980, and that the first time he learned of the default judgment was on May 2, 1980, when J.B. Barbee informed him that he had received a bill of costs in this litigation. This caused Yaffe to check his files which contained the previously mentioned correspondence from Horne and to contact the Clerk's office which verified that a default judgment had been entered. Unfortunately, Mr. Yaffe's affidavit has not been made a part of the record under Rule 24(e) of the Tennessee Rules of Appellate Procedure. Although defense counsel contends that he communicated the information contained in his affidavit to the trial court at the May 9, 1980, hearing on the motion to set aside the default judgment, his affidavit was not filed with and made a part of the record by the trial court.

Did the trial court abuse its discretion when it set aside the January 23, 1980, default judgment?

Rule 55.02 of the Tennessee Rules of Civil Procedure provides that "[f]or good cause shown the court may set aside a judgment by default in accordance with Rule 60.02." Rule 60.02 provides, in pertinent part, that:

"On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation or other misconduct of an adverse party; (3) a judgment is void; (4) the judgment has been set aside, released or discharged, or a prior judgment upon which it is based has been reversed or otherwise vacated, or it is no longer equitable that a judgment should have prospective application; or (5) any other reason justifying a relief from the operation of the judgment. A motion shall be made within a reasonable time, and for reasons (1) and (2) not more than one year after the judgment, order or proceeding was entered or taken."

Under Rule 60 "the burden is on the movant to set forth, in a motion or petition and supporting affidavits, facts explaining why the movant was justified in failing to avoid the mistake, inadvertence, surprise or neglect." Tennessee State Bank v. Lay, Tenn. App., 609 S.W.2d 525 (1980). The setting aside of a default judgment lies within the sound discretion of the trial court. Keck v. Nationwide Systems, Inc., Tenn. App., 499 S.W.2d 266 (1973).

Federal courts have made a sharp distinction, in the application of Rule 60, between final judgments and default judgments.

"The cases calling for great liberality in granting Rule 60(b) motions, for the most part, have involved default judgments. There is much more reason for liberality in reopening a judgment when the merits of the case never have been considered than there is when the judgment comes after a full trial on the merits. On the other hand, the leading cases speaking of a requirement of exceptional or extraordinary circumstances have been cases of motions under Rule 60(b)(6). That subdivision of the rule does require a very special showing by the moving party and it does not assist sound analysis to repeat those phrases in cases brought pursuant to the other portions of Rule 60(b), under which a less demanding standard applies." Wright Miller, FEDERAL PRACTICE PROCEDURE, § 2857, p. 160.

In applying Rule 60(b), Federal Rules of Civil Procedure, to default judgments, the courts have given it a liberal construction. "Since the interests of justice are best served by a trial on the merits, only after a careful study of all relevant considerations should courts refuse to open default judgments." Securities and Exchange Commission v. Seaboard Corp., 666 F.2d 414 (9th Cir. 1982).

"In applying Rule 60(b)(1) in the context of default judgments, courts have gone beyond the bare wording of the rule and established certain criteria which should be considered in deciding whether the designated standards have been satisfied. These criteria . . . include (1) whether the default was willful; (2) whether defendant has a meritorious defense; and (3) the level of prejudice that may occur to the non-defaulting party if relief is granted." Davis v. Musler, 713 F.2d 907 at 915 (2nd Cir. 1983).
See also, Thorpe v. Thorpe, 364 F.2d 692 (D.C. Cir. 1966); Wilson v. Moore and Associates, Inc., 564 F.2d 366 (9th Cir. 1977); United States v. $55,518.05 in U.S. Currency, 728 F.2d 192 (3d Cir. 1984).

In reversing the trial court and reinstating the default judgment in this cause, the Court of Appeals relied upon Hopkins v. Hopkins, Tenn., 572 S.W.2d 639 (1978). The order that was the subject of controversy in the Hopkins case was not entered by default. In Hopkins, Mary Hopkins sued her husband for an absolute divorce. A default judgment was entered against the husband. A hearing was held on March 9, 1976, which resulted in a final decree being entered which granted the plaintiff an absolute divorce and which awarded $350.00 in attorney fees to the plaintiff. More than thirty days after the final decree was entered, the plaintiff filed a petition to amend that decree, alleging that at the hearing the court had awarded to her as alimony the defendant's interest in real property in Memphis, Tennessee, and a 1972 Ford station wagon. The trial court which entered the final decree declined to grant the plaintiff relief under Rule 60. This Court determined that the trial court, which was in the best position to determine if the final decree reflected its findings at the March 9, 1976, hearing, did not abuse its discretion in denying relief to the plaintiff. The plaintiff failed to offer any proof which justified "invocation of the extraordinary relief of setting aside a final judgment." 572 S.W.2d at 640.

As has been noted above, courts often apply a different standard when faced with a Rule 60 motion in regard to a default judgment. Unlike the Hopkins case in which relief from a final judgment after a hearing was deemed to be extraordinary under Rule 60, Rule 60 is construed with liberality to afford relief from a default judgment. Another crucial distinction is that the trial court in Hopkins declined to afford the plaintiff relief under Rule 60. In the case at bar, the trial court exercised its discretion by determining that the default judgment should be vacated and that a hearing on the merits should be held. Obviously, the trial court is in the best position to assess the various factors that should be considered in determining whether a default judgment should be vacated and its finding is entitled to great weight. Moreover, unlike the Hopkins case, the record in this cause reflects why the defendant failed to appear at the January 23, 1980, trial. This case was set for trial in open court before defense counsel entered an appearance for the defendant. No order setting the case for trial was entered. After an answer was filed, the clerk's office failed to notify defense counsel that this case has been set for trial.

Our review of the record indicates that there was sufficient evidence before the trial court to support his decision to vacate the default judgment and to try this case on its merits. Accordingly, we find that the trial court did not abuse its discretion in vacating the default judgment and permitting this cause to be tried on its merits.

In Campbell v. Archer, Tenn., 555 S.W.2d 110 (1977), this Court, in dealing with a somewhat analogous fact situation, determined that a trial judge abused his discretion when he refused to set aside a judgment. While the Campbell case involved a motion for a new trial under Rule 59 of the Tennessee Rules of Civil Procedure, the analysis employed by the Court in that case is equally applicable to the facts involved in the case at bar. In Campbell, attorney Alfred Taylor was retained to represent the defendants and he filed an answer on their behalf. After the case had been continued on two occasions, in mid-February, 1975, the trial court reset the cases for trial on March 11, 1975. The clerk prepared a notice of the trial date and sent it to Taylor in mid-February, 1975. Although it was not denied that Taylor's office received notice of the trial date, Taylor denied that he was personally aware of the trial date until he was informed that the trial had begun at mid-morning on March 11, 1975.

Four days prior to the March 11, 1975, trial date, Taylor and the defendants decided to go their separate ways. The defendants retained another attorney to represent them who promptly obtained the pertinent files from Taylor. The newly hired attorney was never advised by Taylor or anyone else that the case was set for trial on March 11, 1975.

On March 11, 1975, the defendants and their attorney failed to appear for trial. The court directed that Mr. Taylor be contacted. Mr. Taylor informed the court that he no longer represented the defendants and would not appear for trial on behalf of the defendants. The trial court determined that it should proceed with the trial. Taylor telephoned the defendants' newly retained attorney and informed him of the ongoing trial. Shortly thereafter while the trial was in progress, the newly retained attorney and one of the defendants appeared in court. The court refused to grant the defense counsel permission to approach the bench during the proceedings. After the presentation of the plaintiff's case, the court instructed the jury which returned judgments in the amounts of $6,000.00 in one case and $4,000.00 in the other case against the defendants. The defendants filed a motion for a new trial under Rule 59, asserting that they had a meritorious defense to the plaintiff's claims, that they had no notice of the March 11, 1975, trial date and that their failure to appear was, at most, "excusable neglect." The trial court refused to grant the defendant's motion to award them a new trial.

We held that the trial court abused its discretion in denying the motion, holding that the defendants had shown "excusable neglect." In so ruling, the court emphasized the facts that the defendants were not personally at fault and that no showing had been made that the plaintiffs would be prejudiced if the judgments were set aside and a new trial was awarded.

In the case at bar, despite the plaintiff's protestations to the contrary, the plaintiff was not prejudiced by the trial court's decision to vacate the default judgment and to try this case on its merits. The plaintiff claims that it was prejudiced because "it could no longer produce two witnesses and had lost letters from the defendant's mother acknowledging the child was her grandson." The first time that the plaintiff claimed that the trial court's action in setting aside the default resulted in such prejudice was at the September 24, 1981, trial. When the defendant's motion to set aside the judgment was heard on May 9, 1980, the plaintiff did not claim that it would suffer any prejudice if the default judgment was vacated. At that hearing plaintiff contended that the trial court had no jurisdiction to hear the motion and that the defendant had failed to show good cause to set aside the default judgment. After the trial court set aside the default judgment, the plaintiff, not the defendant, delayed progress in the litigation for over six months by attempting to appeal a non-final order to the Court of Appeals and this Court. There has been no showing that the plaintiff suffered any prejudice when the trial court set aside the default on May 9, 1980.

The record demonstrates that the defendant had a meritorious defense to the plaintiff's claims. An answer had been filed in this litigation which specifically denied that J.B. Barbee was the father of Cedric Jerome Coleman. Further, J.B. Barbee's affidavit was filed with the Court in conjunction with the motion to set aside the default judgment which denied that he was the father of this child.

Moreover, there is no proof in the record that the defendant's default was culpable or willful. Indeed, the record shows that this case was set for trial in open court before defense counsel entered an appearance, that no order was entered specifying the trial date, that after an answer was filed the clerk never notified defense counsel of the trial date and that the defendant was unaware of the January 23, 1980, trial date. As in the Campbell case, supra, the defendant, J.B. Barbee, was personally free of fault. If there is any fault in regard to the failure to appear for the January 23, 1980, trial, that fault lies in the manner in which the case was set for trial, the clerk's failure to notify defense counsel that the case was set and in defense counsel's office which failed to notice that the trial was set when plaintiff's counsel informed it of this fact in a letter dated December 11, 1979. Such lapses have been held to be excusable neglect by Tennessee courts. See, Campbell v. Archer, supra; Jerkins v. McKinney, Tenn., 533 S.W.2d 275 (1976); Tate v. County of Monroe, Tenn. App., 578 S.W.2d 642 (1979).

The judgment of the Court of Appeals is reversed and the trial court's decision to vacate the default judgment and to try this case on its merits is affirmed. This cause is remanded to the Court of Appeals so that it can consider the pretermitted grounds which the plaintiff has asserted in this appeal regarding the September 24, 1981, jury trial. Costs are taxed against plaintiff-appellee and surety.

COOPER, C.J., and FONES, HARBISON and DROWOTA, JJ., concur.