1 This case was ori gina lly ass igned to J

udge Ro bert A. Lanier who recused him self sua spon te . Special Judge James F. Arth ur, III

entered t

he order grant

ing default

judgment. Judge

D’Army Bailey ente

red the order

denyi n g defend ant’s mo tion to set aside def ault judgm ent and c onsent o rder dism issing third-p arty com plaint. Judge Jo hn R. McCarroll, Jr. ent

ered the orde

r of judgment on wri

t of inqui

ry. 

### IN THE COURT OF APPEALS OF TENNESSEE

AT JACKSON May 2000 Session ALVIN O. HERRING, JR. v. INTERSTATE HOTELS, INC.

d/b/a MEMPHIS MARRIOTT
Appeal from the Circuit Court for Shelby County No. 70025 T.D. John R. McCarroll, Jr., Judge 1

No. W1999-01055-COA-R3-CV - Decided August 14, 2000

This is a dispute between Plaintiff Alvin O. Herring, Jr. and Defenda nt Interstate Hot

els, Inc. d/b/a Memphis Ma rriott (“Memphis M arriott”) rega

rding the theft of

Mr. Herring’s pr

operty from t

h e Memphis Marriott’s premises. The Memphis Marriott argues on appeal that the trial cour

t erred in denying its motion for an extension of time to file an answ

er to Mr. Herring ’s complaint, in granting Mr. Herring’s motion for a default judgment, and in denying its motion to se t aside the defau

lt judgment. For the reasons set forth below, we affirm the ruling of the trial court. Tenn. R. App. P. 3; Judgment of the Circuit Court Affirmed; and Remanded.

D AVID R. F ARMER , J., delivered the opinion of the cour

t, inwhich W. F RANK C RAWFORD , P.J., W.S. and H OLLY K. L ILLARD , J., joined.

E. Patrick Lancaster and Raymond J. Lepone, Memphis, Tennessee, for the appellant, Inter state Hotels, Inc. d/b/a

Memphis Marriott. James T. Allison, Memphis, Tennessee, for the appellee, Alvin O. Herring, Jr.

OPINION-2-

On May 23, 1994, Mr. Herring’s 198 8 Dodg e Grand Caravan and its contents were stolen from the parking lot

of the Memphis Marriott, where Mr. Herring was a registered gue st. On May 22, 1995, Mr. Herring filed a negligence action against the Memphis Mar riott. Mr. Herring atte mpted to serve notice of the action on I

nterstate Hotels , Inc., the co rporation that own

s th e Memphis Marriott, by serving Ralph Killebrew, an attorne y in Chattan ooga. After ac cepting this service, Mr. Killebrew re turned the summons and complaint by mail and notified Mr. Herring’s attorney by telephon

e that he was not th

e registered a

gent for servic

e of process for

the Intersta

te Hotels, Inc. that operates the Memphis Marriott. Mr. Herring’s attorney then contacted the office of the Tennessee Se

cretary o f State and learn

ed that there are two corporat ions that operate

in Tennessee under

the name of Interstate Hotels, Inc. and that, while Mr. Killebre w is the registered agent for the first Interstate Hotels, Inc., the registered agent for

the second In

terstate Hotels,

Inc. is
a Knoxville

company known as C.T. Corporation Systems (“C.T. Corporation”). After Mr. Herring subsequently

attempted to serve C.T. Corporation, C.T. Corporation sent a letter to Mr. Herring’s attorney return ing the summ

ons and complaint and stating that it was not the registered agent for servic e of pr ocess for Interstate Hotels, Inc. Mr. Herr ing’s attorney subsequently conta cted C.T. Corporation and was informed that he needed to specify which I nterstate Hotels, Inc. he was trying to serve because C.T. Corporation was the registe

red agent for

several Inte

rstate Hotels,

Inc., each being identified by a different number. Mr. Herring’s attorne y then contacted t

he corporate headquarters of Interst

ate Hotels , Inc. but the person that he spoke with in the legal department refused to tell him the identification number that corresponded to the Memphis Marriott and told Mr. Herring’s attorney that he would have to do his own research. Mr. Herring again c ont acted the Secretary of State, who sent

him a printout stating that C.T. Corporation was the registered agent for Interstate H

otels, Inc. #112. On July 31, 1995, Mr. Herring filed a motion for a default judgment and m ailed a copy of the motion to C.T. Corporation. In a letter dated July 28, 1995, C.T. Corporation was informed by mail t hat a hearing w

as scheduled on th

e motion for a def

ault judgment. The Memphis Marriott’s attorney received actual notice of this hearing on August 6, 1995. Thereafter on August 11, 1995, the hearing on the motion for a default judgment was held, at which time the Memphis Marriott’s attorney filed a motion to e xtend the time in which the Memphis Marriott could answer Mr. Herring’s complaint. The trial judge denied the motion for an extension of time and granted Mr. Herring’s motion for a defa

ult judgment. The Me

mphis Marriott subsequently

filed a motion to set

aside the defaul

t judgment, which

was denied by

the trial court. A hearing on a wr

it of inquiry w

as held in April of 1999. Thereafter on May 6, 1999, the trial court entered a judgm ent in favor of Mr. Herring and against the Memphis Marriott in the amount of $98,051.40. This appeal by the Memphis Marriott followed.

The issues raised

on appeal by

the Memphis Marrio

t, as we perceiv

e them, are as fo

llows:

I. Did

the trial court err in denying the Memphis

Marriott’s motion for an extension of time t

o file an answer

to Mr. Herring’ s complaint?

II. Did the trial cour

t err in grantin

g Mr. Herring ’s motion for a def ault judgment?-3-

III. Did

the trial court err in denying the Memphis Marriott’s motion to set aside the default judg

ment? To the extent that these issues involve questions of fact, our review of the trial court’s ruling is de
novo with a presumption of correctness and we may not reverse the court’s factua

l findings unless they are contrary to

th e preponderanc e of the evidence. See, e.g., Randolph v. Randolph , 937 S.W.2d 815, 819 (Tenn. 1996); T.R.A.P. 13(d). With respect to the

court’s legal co

nclusions, however, our review is de novo with no presumption of correctness. See, e.g., Bell ex rel. Snyder
v. Icard, Merrill, Cullis, Timm, Fur en and Ginsburg, P.A. , 986 S.W.2d 550, 554 (Tenn. 1999); T.R.A.P. 13(d).

We first address whether the trial court erre

d in denying

the Memphis

Marriott’s motion for
an extension of time to f

ile an answer to Mr. Herring’s complaint. Rule 4.05 of the Tennessee Rules of Civil Procedure, which addresses the service of process on a defendant that is located outside of Tennessee, states that “[s]ervi ce by mail

upon a corporation shall be . . . by delivering the copies [of the summons and complai nt] to any other agent authorized by appointment or by law to receive service on behalf of the corporation.” T.R.C.P. 4.05(3). Additionally, s ec tion 48-25-110 of the Tennessee Code A

nnotated provide

s in pertinent par

t as follows:
(a) T he registered agent of a foreign corporation authorized to transact business in this state is the corporation's agent for service of process, notice, or demand required or permitted by law to be served on the foreign corporation.

Tenn. Code Ann. § 48-25-110(a) (1995). The registered agent for service of p

rocess for Inte

rstate Hotels, Inc., the company that owns the Memphis Marriott, is C.T. Corporation. On June 7, 1995, Mr. Herring sent by certified mail copies of the summons and complaint to C.T. Corporation at its office in Knoxville. As evidenced by the signature “M. Hall” on the green card that accompanied this mailing, these

copies were received by C.T. Corporation on June 12, 1995. Under Rule 12 of the Tennessee Rules o

f Civil Procedure,

the Memphis Marrio

tt was required to

serve an answer

to M r. He rring’s complaint within thirty days of June 12, 1995. See T.R.C.P. 12.01. The M emphis Marriott failed to answer

Mr. Herring’s co

mplaint within this pe

riod of time. The Me

mphis Marriott argues on appeal that

the trial court sho

uld have allowed i

textra time to file its answer because it’s attorney di d not become aware of Mr. Herring’s lawsuit until August 6, 1995, just five days prior to the August 11, 1995 hearing on Mr. Herring’s motion for a default judgment. We disagree. The Memphis Marriott was put on notice of Mr. Herring’s lawsuit when C.T. Corporation, its agent for service of process, received by certified mail

copies of the summo

ns and complaint. T

he Memphis Marriott contends that C.T. Corp oratio n failed to notify either the Memphis Marriott or its parent corporati on, Interstate Hote ls, Inc., that Mr. H

erring had filed

a lawsuit against t

he Memp hi s Marriott. However, this all eged failure of

C.T. Corporation wa

s not the result

of any fault on the part of Mr. Herring. To th

e contrary, it ap

pears that M

r. Herring went to great lengths to obtain the correct name and registered agent

for the Memphis Marriott. Not only did he contact by telephone C.T. Corporation, but he also spoke with someone in the legal department of Interstate Hotels, Inc.’s corporate headquarters regarding the existence of his lawsuit. A motion for an extension of

time to filean answer is the type of matter that is left largely within

the sound discreti

on of the trial cou

rt.2 Rule 55.01 w as amende d in 1996, 19 97, and 19 98 and cu rrently provides as fo llows:

When a party against whom a judgment for affirmative relief is sought

has fai led to pl ead or otherwise defend as provided by these rules an d that fact is mad e to appe ar by affidavit or otherwise, judgment by default may b e entered as follows:

The party en

titl ed to a judgme

nt by default shall ap ply to the cou rt. All part ies agai nst whom a default jud gment is sought shall be served with a writ ten notice of theapplication f or judgment at least thirty days before the heari ng on the application, regardless of whether the p arty has made an appea rance in the act ion. No judgment by default shall be entered against an infant or incompetent person unless represented in the action by a general guardian, committee, conservator, or other such representative who has appeare d therein. If, in order to enable the court to enter judgment or to carry it into ef fect, it is necessar

y to tak e an account

or to dete

rmine th e amount of

damage s or to establish the tru th of any averment by evidence or to make an investigation of any other matter t he court may conduct such hearing s or order such referenc es as it deems necessary and proper and shall accord a right of t rial by jur

y to the part

ies when and as r

equired by any st

atute.
(continu ed...)
-4- Under the circumstances of the case at bar, we cannot say that the trial court abused its discr eti on in denying the motion for an extension of time filed by the Memphis Marriott. We therefore affirm the trial court’s ruling with respect to this matter.

We next consider the

Memphis Marriott’ s contention that th e trial court err

ed in granting Mr. Herring’s motion for

a default judgment. At the time that Mr. Herr ing filed his motion f

or a default judgment, rule 55 of

the Tennessee Ru

le of Civil Procedur

e provided in per

tinent part as foll

ows:
When a party against whom a judgment for affirmative relief is sought has failed to plead or otherwise defend as provided by these rules and that fact is made to appear by affidavit or otherwise, judgment by default may be entered as follo

ws:
The party entitled to

a judgment by defa

ult shall apply to the court therefor; butno judgment by default shall be entered against an infant or incompetent person unless represented in the action bya gener al guardian, committee, conservator, or ot her such representa

tive who has appea

red therein. If

the party against who m judgmentby default is sought has appeared in the action, such party (or, if appearing by representative, t

he repres entative) shall be served with written notice of the application for judgment at least five (5) days prior to the hearing on such application. If, in order to enable the court to enter judgment or

to carry it into ef

fect, it is necessary to ta

ke an account or to determ ine the amount of da mages or to establish the truth of any avermen t by evi dence or to make an investigation of any other matter the court may conduct such hearings or order such references as it deems necessary and proper and

shall accord a right of trial by jury to the parties when and as required by any statute. T.R.C.P. 55.01 (1995 ed.). 2 The Memphis Marriott was served, through C.T.Corporation, with2 (...continued)

T.R.C.P. 55.01 (1999 ed .).

-5- notice of Mr. Herring’s complaint on June 12, 1995. The Memphis Marriott was required by Rule 12 of the Tennessee Rules o f CivilProcedure to answer the complaint within thirty days the reafter. See T.R.C.P. 12.01. At the time of the Au gust 11, 1995 hearing on Mr. Herring’s motion for a default judgment, the Mem

phis Marriott had n

ot fil ed its answer. Bec

ause the Memphis Ma

rriott hadfailed to plead or

otherwise set for

th a defense to

Mr. Herring’s complaint, the trial court was authorized by Rule

55 to enter a default judgment in favor of Mr. Herring. See T.R.C.P. 55 .01. We therefore affirm the order of the trial court granting Mr. Her ring’s motion.

Fin all y, we must

determine whether

the trial court erred in denying the Memphis Marriott’s motion to set aside the default judgment. Rule 55 states that “[f]or good cause shown the court may set aside a judgment

by default i

n accordance w

ith Rule 60.02.” T.R.C.P. 55.02. Rule 60.02 of the TennesseeRules of Civ il Procedure, which provides for relief from judgments or orders under certain circums

tances, states in

pertinent part a

s follows: On motion and upon such terms as are just, the court may relieve a party or the party's legal representative from a final judgment, order or proceeding for the following reasons: (1) mistake, inadv e rtence, surprise or excusable neglect; (2) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an a

dverse party ; (3) the judgment is void; (4) the judgment has been satisfied, 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 justify ing relief from the operation of the judgment. . . .

T.R.C.P. 60.02. The setting aside of a judgment pursuant to Rule 60.02 lies within the sound discretion of the trial court and the court’s ruling on a motion requesting this relief may not be d isturbed absent an abuse of discretion. See Underwood v. Zurich Ins. Co. , 854 S.W. 2d 94, 9 7 (Tenn. 1993); Toney v. Mueller Co. , 810 S.W.2d 145, 147 (T enn. 1991); Day v. Day , 931 S.W.2d 936, 939 (Tenn. Ct. App. 1996); Ellison v. Alley , 902 S.W.2d 415, 418 (Tenn. Ct. App. 1995). When the moving party is seeking to set aside a default judgment, the requirements of Rule 60.02 should be construed

liberally. See Nelson v. Simpson , 826 S.W.2d 483, 485 (Tenn. Ct. App. 1991). If there is a reasonable doubt regarding whether the default judgment

should be set aside, the court should exercise its discretion if

favor of granting the motion so that the matter may be resolved on the merits. See Tennessee State Bank v. Lay , 609 S.W.2d 525, 527 (T enn. Ct. App. 1980) ; Keck
v. Nationwide Sys., Inc. , 499 S.W.2d 266, 267 (Tenn. Ct. App. 1973). A party seeking relief under the first reason stated in Rule 60.02 has the burden of setting forth facts explaining wh y it w as justified in failing to avoid the mistake, inadvertence, surprise, or neglect that forms the basis for the-6-

relief requested. See Travis v. City o f Murfreesboro , 686 S.W.2d 68, 69 (Tenn. 1985); Turner v. Turner , 776 S.W.2d 88, 92 (Tenn. Ct. App. 1988).

The Memphis Marriott argue s on appeal that the

trial court should

have granted its motion to set aside the default judg

ment under the fir

st reason set for

th in Rule 60.02 beca

use its failure to filean answer to Mr. Herring’s complaint was the result of a mistakeor excusable neglect. We do notthink that any mistake occurred in the case at bar. Mr. Herring served the correct agent for service of process, C.T. Corporation, and there is no allegation that C.T. Corporation was mistaken withrespect to the fact that it was, in fact, the reg istered a gent for the Interstate Hotels, Inc. that
owns the Memphis Marriott. We do agree, how ever, that neg

lect occurred i

n the case at bar

. It is the position of the Memphis Marriott that, after being properly served, C.T. Corporation neg lected to timely notify

Interstate H

otels, Inc. th

at Mr. Herring

had filed a lawsu

it against the Me

mphis Marriott. Although we agree that this alleged inaction on the part of C.T. Corporation constitutes neglect,we conclude that this type of neglect cannot be char acterized as excusable within the meaning of R ule 60. 02. The Mem phi s Ma rri ott has not dem ons tra ted any w ay i n which C.T

. Corporation was justified in allegedly failing to avoid the neglect that occ urred in the case at bar. Rather, the Memphis Marriott seeks to avoid the consequences of this neglect by noting that it was C.T. Corporation, not the Memphis Marriott, that acted in a neglectful manner. Because C.T

. Corporation is an agent of the Memphis Marriott, however, we conclude that any neglect

on the part of C.T. Corporation is a

lso attributable to

the Memphis

Marriott. Under the circumstances discussed above, we conclude that there was not a reasonable doubt regarding whe ther Mr. Herring’s

default judgment should be set aside

and that, consequ

ently, the tr

ial court did

not abu se its discretion in denying the Memphis

Marriott’s motion requesting relief under Rule 60.02. Thus, the court’s denial of the Memphis Marriott’s motion to set aside the default judgment is affirmed.

Based on the foregoing, the ruling of the trial court is in all respects affirmed. The costs of this appeal are asse

ssed to the appella

nt, Interst ate Hotels, Inc. d

/b/a Memphis Marri

ott, and its
sur ety, for whi ch ex ecut ion may i ssu e ifnece ssa ry.

___________________________________ DAVID R. FARMER, JUDGE