IN THE COURT OF APPEALS OF THE STATE OF MISSISSIPPI NO. 2016-CA-01439-COA ODIS EMERY APPELLANT

v. GREATER GREENVILLE HOUSING AND REVITALIZ ATION ASSOCIATION APPELLEE

DATE OF JUDGMENT: 09/02/2016 TRIAL JUDGE: HON. MARIE W ILSON COURT FROM W HICH APPEALED: W A SHINGTON COUNTY CHANCERY COURT ATTORNEYS FOR APPELLANT: DEREK D. HOPSON DEREK DEW AYNE HOPSON JR. ATTORNEYS FOR APPELLEE: ROBERT N. W ARRINGTON ALEXANDRA HUTTON OGLESBY NATURE OF THE CASE: CIVIL - REAL PROPERTY DISPOSITION: REVERSED AND REMANDED - 06/12/2018 MOTION FOR REHEARING FILED: 06/25/2018: DENIED; REVERSED AND REMANDED - 01/08/2019 MANDATE ISSUED:
EN BANC. CARLTON, P.J., FOR THE COURT: MODIFIED OPINION ON MOTION FOR REHEARING ¶1. The m otion f

or rehearing is denied. The previous opinion of this court is withdrawn and this opinion is substituted in its place. ¶2. T h i s c a s e c o n c e r n s a def ault judgm ent e ntered in a lawsuit in which G r e a t e r Greenville Housing & R e v italization Association (“Greater Greenville”) sought t o ref orm

a warranty deed convey ing c ertain p r o p e r ty to Odis Em ery in 2011. O ver f our y ears af

ter executing and delivering the warranty deed to Em ery , Greater Greenville discovered that thelegal descriptions in the warranty deed contained f our a d d i t i o n a l properties t hat Greater Greenville claim s it did not intend to convey

. ¶3. Af ter it was unable to resolve the m atter with Em er y , G r e a t e r G reenville f iled suit, seeking a decree ref

orm ing the warranty deed to exclude the f o ur additional p roperties based
upon m utual m istake and a scrivener’s e rror. E m ery was served with t he sum m ons and the

com plaint but f

ailed to tim ely f

i l e a n a n s wer. Greater Greenville o btained a def ault judgm ent, and just over three weeks later, E m ery f i l ed his m otion t o s et aside the def ault judgm ent. ¶4. The chancery court denied Em e ry ’s m otion, apply ing the three-prong balancing test used in assessing w hether a def a ult judgm ent should be set aside under R ule 55(c) and Rule 60(b) o f the Mississippi Rules of C ivil Procedure. 1 The chancery court f ound that although
Greater Greenville did not s ho w it would be prejudiced if the def ault judgm ent were set aside, Em ery had f

ailed to show good cause f or his def ault, and he f

ailed to show he had a colorable def

ense to Greater Greenville’s deed-ref orm ation lawsuit. ¶5. Em ery appeals, arguing that t h e c h a n c e r y c o u r t ’ s r ef usal to s et aside the def

ault judgm ent was an a

buse o f discretion because he h ad shown both good cause f or his def ault, and that he had a colorable def e nse to Greater Greenville’s lawsuit. ¶6. W e f

ind that the chancery court did not abuse its discretion in f inding against Em ery

on the good cause prong of the R ule 60(b) three-prong balancing t est—or in f inding against
Greater G r e e n v i l l e on the prejudice prong. W e f ind, however, that the record shows that

1 S ee B B B u g

g ies In c. v. L eo n , 1 5 0 S o . 3 d 9 0 , 1 0 1 (¶2 3 ) (M iss. 2 0 1 4 ).

2Em ery dem onstrated he had a c olorable def ense to Greater Greenville’s lawsuit a n d that the chancery court’s determ ination that he did not have a colorable def ense was based on an error of l aw. Accord i n g l y , based on the record and the applicable law, we hold that t he def ault judgm ent against E m ery should be set aside under t he Rule 6 0(b) three-prong balancing test. Theref ore, we reverse the chancery court’s judgm ent and rema n d t h i s c ase f or f urther proceedings.
FACTS ¶7. Greater Greenvi l l e i s a M i s s i s s i p p i n on-prof it corporation located i n Greenville, Mississippi. O dis Em e ry lives in Hollandal e, Mississippi. On March 2, 2011, Em ery and
Greater G reenville executed an o p tion to purchase certain properties. Fredrick S pencer was the Executive Director o f Greater Greenville a t that tim e and executed the option t o purchase on Greater Greenville’s behalf . The option provided as f ollows:
OPTION TO PURCHASE
Greater Greenville H ousing & Revitalizati o n A ssociation Inc. has agreed to s[ e ll] the f

ollowing properties to Odis Em ery of 609 Taf

t Street, Hollandale, MS 38748 f

or $75,000.00:

• 510 W right Street Greenville, MS

• 544 S. Hinds Street Greenville, MS

• 405 A & B North Street Greenville, MS

• 464 Hughes Street Greenville, MS

• 415 Slaughter Street Greenville, MS

• 417 Slaughter Street Greenville, MS This of f er is contingent upon the buy er approval f or f inancing. ¶8. The option c ontains no recital that Em ery paid any consideration f or it, and there is

no evidence in the record t hat Em ery did s o. The option also does not contain a tim e f r am e

3within which Em ery m ust exercise the option upon m eeting the f inancing contingency

. ¶9. According to Em ery , and as supported by Spencer’s a f f idavit, Em ery and Spencer, as the a gent f

or Greater Greenville, viewed the original s i x properties a n d then agreed to include
f ou r a d d i t i o n a l properties in the sale. A s s et f orth in the Spencer af

f idavit, the reason f

or including the f

our additional properties was to assist Em ery with the loan he had taken out

to p urchase t he p roperty 2 —and to address the pressure that the City o f Greenville was putting

on Greater Greenville to revitalize the subject properties, including the f o ur a d d itional properties. These f

our additional properties included t he hom es and s u r rounding property located at the f

o llowing addresses:

• 542 South Hinds Street Greenville, MS

• 509 Roach Street Greenville, MS

• 511 Roach Street Greenville, MS

• 427 W right Street Greenville, MS ¶10. On April 18, 2 0 1 1 , E m e r y p a i d Greater Greenville $75,000.00, and G reater Greenville executed and delivered a warranty deed convey ing c ertain real p roperty to Em ery . The legal property descriptions in the warranty deed c o n t a i n ed a ll ten properties, the original six properties listed in the option, and the f our a d d i t i o n a l p roperties listed above, which were described by lot and block designations and m etes and bounds descriptions. A dditionally , th e l e g a l d e scriptions f

or t he properties located at “464 Hughes Street” and “415-417 Slaughter Lane” are labeled in the deed; there are notations in t he m argin f or properties on “W right Street,” “S. Hinds,” and “North Street,” but they contain no specif ic street-num

ber

2 A lth o u g h th e r eco rd d o es n o t co n tain d o cu m en tary ev id en ce th a t E m ery o b tain ed f in an cin g , h e asserts in h is A p p ellan t’s B rief th at h e d id so , an d th is f

act is n o t d isp u ted

. 4ref

erences. T h e r e w ere no notations or labels in the warranty deed regarding the legal description encom

passing the Roach Street properties. 3 ¶11. Over f

our y ears af

t er convey ing t he p roperty to Em ery , G reater Greenville discovered the discrepancy between the hom e addresses listed in the option to purchase and the warranty deed’s legal descriptions, which included the original s i x p roperties listed in the option and the f our additional properties. By a letter dated Decem ber 23, 2 015, Greater Greenville

attem pted to resolve what it b elieved to be a scrivener’s error in the deed’s legal descriptions by contacting Em ery and the attorney who represented him at that tim e, W illie B ailey

. In that let t e r , Greater G reenville set o u t what it believed were the f a cts and issues r elating to the deed’s legal descriptions and detailed an of f e r t o resolve the m atter without the necessity of litigation. ¶12. The record contains the af f idavit of W i llie B ailey , in which h e said t hat he withdrew
f rom r epresenting E m ery on or a b o u t D e c e mber 23, 2015, but bef ore t hat tim e he had
convey ed to Greater Greenville’s counsel that Em ery disputed the m a tter and would def end against any f

uture litigation regarding the m at t e r . Upon learning t hat Bailey no longer represented Em ery , Greater G reenville’s counsel contacted Em ery directly by a letter dated January 14, 2016, r eiterating t he f acts and issues set out in the earlier lette r i t had sent to Bailey and proposing settlem e nt. ¶13. W h en G reater Greenville did not receive a response f rom Em ery , it f

iled a Com

plaint

3 G reater G reen v i lle h ad p r ev io u sly g ran ted P lan ters B an k a d eed o f t ru st o n certain p ro p erty , in clu d in g th e p ro p erty d escrib ed in th e w arra n t y d e ed

. In co n n ectio n w ith th e clo sin g o n t h e p ro p erties, P lan ters B an k ex e cu ted an d d eliv ered f iv e p a rtial releases o f G r eater G reen v ille’s d e ed s o f tru st o n th e p ro p erty

. 5to Ref

orm Deed and f

or Other Relief in the Chancery Court of W ashington County , M ississippi, nam ing Odis Em ery , Planters B ank & Trust C om pany (Planters Bank), and
Em ery ’s two apparent judgm ent creditors, Tower Loan and the Mississippi Departm ent of Revenue, as def

endants. G reater Greenville sought, am ong other things, to obtain a decree ref orm ing the deed due to a m utual m ist a k e a nd scrivener’s error and conf irm i ng title in
Greater Greenville f

or the f our a dditional properties, nam el y t h e h o mes and surrounding property located at 542 S outh Hinds Street, 509 Roach S t r e e t , 5 1 1 Roach S treet, and 427
W r ight Street, in Greenville, Mississippi. ¶14. Em ery was personally served with the sum m ons and a c o p y o f t h e c o m plaint on January 28, 2016. 4 It is u ndisputed that Em ery did not serve any responsive p leading within 30 day s of

service of

the sum m ons and com

plaint. To avoid repetition we will address the circum stances surrounding Em ery ’s f ailure to tim ely answer in the discussion section below. ¶15. On March 2, 2016, counsel f or Greater G reenville f

iled a r e q u e s t f

o r a n e ntry

of def ault a gainst Em ery . On that sam e day the clerk entered a def ault against Em ery f

or f ailure

to appear, plead, or otherwise def e nd the action. The next day , Greater G reenville f iled its

m otion f or def ault j udgm ent and other relief and m ailed a c opy of the m otion to Em ery . On March 7, 2016, a f

inal judgm ent was entered in which, am ong other f o r ms o f relief

, the

4 G reater G reen v i lle also serv ed th e o th er d ef en d an ts. O n F eb ru a ry 1 9 , 2 0 1 6 , G reater G r een v ille f

iled a n o tice o f v o lu n tary d ism i ssal as to d ef en d an t T o w er L o an b e c au se T o w er L o an ’s j u d g m en t ag ain st E m ery w as sh o w n to h av e b een s atisf ied af ter th e f i l i n g o f th e co m p lain t. D ef

en d an t M ississip p i D ep artm en t o f R ev en u e f i led an e n try o f ap p earan ce o n F eb ru ary 1 9 , 2 0 1 6 , in w h ich it stated th at th e D ep artm en t h ad n o o u tstan d in g lien s ag ain st t h e p r o p e r t y t h at is th e su b j ect o f th is actio n o r ag ain s t E m ery . D ef e n d an t P lan ters B an k f iled a w aiv er o f p ro c ess o n M arch 1 , 2 0 1 6 , w aiv in g p r o cess an d j o in in g in t h e c o m p lain t f iled b y G reater G reen v ille an d in th e relief req u e s ted

. 6chancery court granted a def ault judgm ent against E m ery ; ref orm ed the warranty deed f rom Greater Greenville t o Em ery dated April 1 8, 2011, t o e xclude the additional f our properties due to m utual m istake and a scrivener’s error; and ordered that Greater Greenville was the lawf ul holder of title to the f

our additional properties, exclusive of Em ery ’s interests. The
f inal judgm ent was am ended t he n e x t day when it was discovered that part o f the legal description had been o m itted f rom the March 7 f

inal judgm ent. The am ended f inal j udgm ent

was entered on March 9 , and the clerk f iled this judgm ent in the land records of W a shington County on March 15. 5 ¶16. Im m e diately f

ollowing the entry of the d ef ault judgm e n t, Greater Greenville had the
f our additional properties classif ied as t a x e x em

pt, paid the delinquent taxes on those properties, and had Planters Bank re i n s t a t e t h e deed of trust with Greater G reenville and release its deed of

trust with Em ery

as to the f

our additional properties. ¶17. On April 1, 2016, just o v er t h r e e weeks af ter entry of the def

ault j udgm ent, Em ery f iled his m otion to s et aside the def ault judgm ent and f

o r leave to f

ile an answer. Counsel
f or Greater Greenville received a copy of this f iling o n April 4 af

ter t he actions it took in accordance with the def

a ult judgm ent had already taken p lace. Greater G r e enville f iled a
response to Em ery ’ s m otion on A pril 15, and the m atter was set f or an August 23 hearing.
Four day s bef

o re the hearing, Em ery f

i led his r ebuttal supporting his m otion to set aside the def ault judgm e nt. ¶18. Af ter conducting a hearing, the chancery court entered its f inal order deny ing Em ery ’s

5 F o r clarity , w e ref

e r t o th e M arch 9 am en d ed f in al j u d g m en t as th e d ef

au lt j u d g m en t. 7m otion t o set a side the def ault judgm ent. T h e c h ancery court f irst f ound that the def

ault judgm ent was not v oid based upon Em ery ’ s argum e n t t h a t h e was entitled to three-day s notice prior to entry of def ault. 6 The chancery court then applied the three-prong b alancing

test u sed in assessing whether a def ault judgm ent should b e s et a s ide pursuant t o Rules 55(c) and 6 0(b). Nam ely , the chancery court assessed (1) whether E m ery had “good cause” f or his de f a u lt; (2) whether Em ery h a d a “colorable def ense” to Greater Greenville’s lawsuit; and (3) t he nature and extent of any prejudice to Greater Greenville if the def a ult judgm ent were
set a side. BB Buggies I

nc. , 150 So. 3d at 101 (¶23). Under t his test, the chancery court held that although Greater G reenville would not suf f er prejudice as that term is applied in the Rule 55(c) and Rule 60(b) context, Em ery f ailed to s h o w g o o d cause f or his def a ult, and he did

not show that he h ad a c olorable def ense to Greater Greenville’s deed ref orm ation lawsuit. Accordingly , the chancery court denied Em e ry ’s m otion to set aside the def a u lt judgm ent. ¶19. On appeal, Em ery asserts that (1) there was “good cause shown” f or setting aside the entry of def a ult and the chancery court abused its discretion in f ailing to do so; and (2) the chancery court a

bused its discretion in f

ailing to set a side the def ault judgm ent b e c a u se Em ery show e d (a) he had legitim ate reasons (i.e., good cause) f or def ault; ( b) he has a colorable def

ense to Greater Greenville’s ref o rm a tion lawsuit; and ( c) the delay between entry of def

ault and the f

i ling of his m otion to s et aside def ault judgm ent was not p rejudicial to Greater Greenville.
DISCUSSION

6 E m ery d o es n o t raise th is th ree-d ay n o tice issu e o n ap p eal. 8I. Standard of Review

¶20. “An a

pplication f

or vacation of a def

ault judgm e nt is addressed to the sound d i s c r e tion of the trial c ourt.” Tucker v. Wi l l i a m s , 1 98 So. 3d 299, 309 (¶24) (Miss. 2016) (quoting
Guar. Nat’l Ins. Co. v
. P ittman , 501 So. 2d 377, 388 ( Miss. 1987)). In this regard, “[ t]he trial

court should exercise its d iscretion within the strictures of Rules 5 5(c) a nd 60(b), along with the criteria s et f

o rth by t his Court.” Id. The grant or d enial of a m o tion to set aside an entry of def ault or a def

ault judgm ent is reviewed f o r a b u s e o f discretion. Id. “ But if the trial
court’s decision was b ased on an error of law, t hen we will reverse.” Id. (citing Allstate Ins. Co. v. Green , 794 S o. 2d 170, 173 (¶8) (Mis s . 2 001)). Further, the M ississippi Suprem e Court “has been clear that def ault judgm e nts are not f

avored.” B

B Buggies Inc ., 150 So. 3d

at 1 01 (¶22) (internal quotation m ark o mi t t e d )

. In particular, “trial courts s hould not be grudging in

. . . vacating such judgm ent where showings within the rules h ave arguably been

m ade.” Id. (internal quotation m arks om itted).
II. Setting Aside Entry of Default ¶21. On appeal, Em ery contends that the chancery court abused its discretion in f ailing to
f ind he showed good cause to “set aside the entry of d ef ault” in this case. A review of the record r ef lects, however, that E m ery m ade n o “good cause” challenge to the entry of default bef ore the chancery court. The chancery court s pecif ically m ade this f

i nding in its f

inal order deny ing Em ery ’s m otion to set aside the def ault judgm ent, as f

o llows:
Emer y d o e s not seek to set aside the clerk’s entry of default, he seeks to s et aside a default judgment

. M iss. R. Civ. P. Rule 5 5(c) provides the p rocedural vehicle whereby a def

ault entered by the clerk m ay , “f or good c ause shown,” be set a side by the c ourt. In the e vent t hat a def ault ju d g m ent has been

9entered, the m oving party m ust m ake a showing suf f icient to vacate the judgm ent under Miss. R

. Civ. P. Rule 60(b). King v. S igrest , 641 So. 2d 1158 (Miss. 1994). Thus, Em ery m ust proceed under Rule 60(b). (Em phasis added). ¶22. Em ery ’ s “ good cause to set aside entry of d ef ault” issue i s procedural l y b a r r e d because he did not raise t his issue in the chancery court. Bender v
. N

. Meridian M

obile Home Park , 63 6 S o . 2 d 3 8 5 , 3 89 (Miss. 1994) (“[ A] trial judge cannot b e put in error on a m atter not presented to him

f or h is decision.”); Allgood v. Allgood , 473 So. 2d 416, 423 (Miss. 1985) (“As a p rerequisite t o obtaining review in t his Court, it is i ncum bent upon a l itigant that he

not only p lead but press h is p o int in the trial court.”); A mmons v. Cordova Floors Inc. , 904
So. 2 d 185, 192 (¶25) (Miss. C t. App. 2005) (f i n d i n g i s s u e procedurally barred because it was not raised in the trial court). ¶23. W e now turn to address Em ery ’s argum ents that the def ault judgme n t s h o u l d have been set aside under the three-prong balancing test developed under Rules 55(c) and 60(b) of the Mississippi Rules of

Civil Procedure.
III. Application of the Three-Prong Test under Rule 60 ( b ) in Determ ining Whether a Default Judgm ent Should be Set Aside ¶24. As the M ississippi Suprem e Court has explained, “[ a]ccording t o Rule 55(c), a def ault judgm ent m ay be set a s i d e ‘ [ f ]or good cause shown’ and i n accordance with Rule 60(b).”
BB Buggies Inc ., 150 So. 3 d a t 1 0 1 (¶23) ( quoting M.R.C.P. 55(c)). The Court has articulated a three-pronged b alancing test the t rial court m ust apply in determ i ning whether to set aside a judgm ent pursuant to Rule 60(b): (1) the nature and legitim a cy of the def endant’s reasons f

or his d e f ault, i.e.

1 0whether t he def endant has good cause f

or def a ult, (2) whether the def

endant in f act has a colorable def

ense to the m erits of t he claim , and ( 3) t he nature and extent of prejudice which m ay be s uf f ered by the plaintif

f if the def

a ult judgm ent is set aside. Id. As noted above, we apply a n a b u s e o f discretion standard in reviewing the chancery
court’s d enial of Em e ry ’s m otion to set aside the def a ult judgm ent. I f t he chancery court’s decision is based upon an error of law, however, we will reverse. Tucker , 198 So. 3d 299, 309 (¶24).
A. Good Cause ¶25. The chancery c ourt held that Em ery f ailed to show “good cause” f or his d ef ault, and thus did not m eet t he f

irst prong of Rule 60(b)’s t hree-part balancing test. W e agree. Based

on t he record and t he applicable law, t h e c h a ncery court did not abuse its discretion in

m aking this determ ination. See Pittman , 501 So. 2d at 386-88. ¶26. Em ery c ontends that he presented suf f icient evidence in the chancery court to support

a f i nding in his f

avor on the “good cause” e lem ent. Em ery subm i tted his own af f idavit in which he states that when he was s erved with the com p laint on January 28, 2016, he did not know how to begin addressing the legal substance or p rocess of the case. Im m ediately upon being served, E m ery began s eeking counsel t o r epresent him

. He contacted f our a ttorney s, but none of t hem were available to represent him d ue to scheduling conf

l icts o r other reasons. ¶27. Though E me r y ’ s answer was d ue Monday , February 2 9, 2016, there is n o evidence
in the record that at any tim e af ter being served with t he c om plaint t hat E m e r y c ontacted
Greater Greenville o r its counsel, the c lerk, or the c o urt about this m atter—even though the record ref lects that Em ery knew the n a me a n d address o f Greater Greenville’s counsel, as

1 1Em ery

had just received a proposed settlem ent letter f rom him in January

2016. ¶28. According to t he statem ents in Em ery ’s af f idavit, he was ref

e rred to Renetha Frieson
in March. She was on leave until March 21, so on M a r c h 2 2 E me r y retained Frieson to represent him in this m atter. Her f irst appearance in this case was on April 1, when she f iled the m otion to set aside the def ault judgm ent on Em ery ’s behalf

. ¶29. U n d e r s i mi l a r f

a c t s , t h e Mississippi Suprem e Court i n P ittman f ound that th e def endant truckdriver there had shown no good cause f o r def ault: Hardin was served with a sum m ons which advised him in no uncertain term s that he m ust a nswer within thirty day s or suf f er d ef ault.

. . . Assum ing t hat Hardin could count to thi r ty and had som e rudim entary f am iliarity with the J ulian c alendar, the sum m ons instructed him that his a n swer was due o n De c e mb e r 12, 1 984. That day cam e and passed and, insof ar a s t he record ref lects, Hardin did nothing.
Pittman , 501 So. 2d a t 386-87. I n addition to f inding t hat the sum m ons plainly instructed Hardin as to what he m

u st do, the Court a l so f

ound it was relevant that Hardin knew the

nam e a nd address of the p laintif f ’s attorney , but Hardin still did nothing a bout a ddressing the lawsuit f iled against him

. Id. at 387. The Court acknowledged that although Hardin m ade “repeated ef

f orts to get his e m

ploy er and its insurer to do som ething,” id

. at 388, no answer

was tim ely f

iled. The co n f

u s ion over whether Hardin had insurance c overage, t he Court held, did not justif

y Hardin’s f

ailure to answer the com

plaint. Id. ¶30. The s um m o ns Em ery received in this case contained the s am e p lainly worded warning that h e m ust address the c om

plaint within 30 day s of service “or a [ j]udgm ent by def

ault will be entered against y o u .” The record ref lects that E m ery understood the com plaint n eeded to be handled b ecause he im m ediately began to search f or an attorney . Though we r ecognize

1 2that he attem pted to obtain counsel, caselaw ref lects that this d oes no t e x c u s e him f rom addressing t h e c o mp l a i n t i n som e way bef ore a n answer w as due. Pittman , 501 So. 2d at 386-88. Indeed, even where a def endant obtains counsel , g o o d c a u s e f or def ault is still lacking where the d e f

endant f ails to f ollow-through and ensure an answ e r i s f iled. See
W oodruff v. Thames , 1 4 3 So. 3 d 546, 551, 553 (¶¶8, 15-16) (Miss. 2 014) (f inding no “good
cause” f or def ault where, a lthough d e f

endant was i nitially diligent in taking the com plaint served upon him to an attorney bef o r e t h e thirty day s to answer had expired, he never f ollowed up to see that an answer was f iled); H & W Transfer & C artage Serv. Inc. v. Griffin , 5 1 1 S o. 2d 895, 899 (Miss. 1987) (f inding that although def

e ndant’s initial steps w e r e “reasonable and prudent,” it “ thereaf ter dropped the ball” by f

ailing to f o llow-up and ensure the com plaint was answered); Tippah Cty. v. Childers , 21 So. 3 d 658, 661 (¶12) (Miss. Ct. App. 2009) (“Tippah County dropped the b all af ter it was properly served w ith process and delivered a copy o f the sum m ons and com plaint to its insurance agent. Tippah County was the nam ed def

endant i n t he com

p laint, and i t was Tippah County ’s responsibility to m ake sure that an answer was f i led.”). ¶31. Based on the record and the applicable l a w , w e f i n d n o abuse of discretion in the chancery c ourt’s c onclusion that E m ery f a i led to show suf

f icient c ircum s tances t hat would annul his obligation to tim ely respond to the com plaint in som e f

orm , and the record supports the chancery

court’s f inding that Em ery

did not show good cause f or his def ault. ¶32. “However, lack of good cause alone will not prevent the Court f rom setting aside a def ault j udgm ent i f the o ther two f actors weigh i n f

avor of s etting it a s ide.” BB Buggies Inc. ,

1 3150 So. 3d at 102 (¶24) (citing A m. Cable Corp. v. Trilogy Commc’ns Inc ., 754 S o. 2d 545,

556 (¶44) (Miss. Ct. App. 2000)). W e address the rem aining two f actors below.
B. Colorable Defense ¶33. The Mississippi Suprem e Court has “held unequivocally t hat the second f actor [ in the Rule 6 0(b) balancing t est], the presence of a c olorable def ense, outweighs the other two, and [ t h e S uprem e Court has] e ncouraged trial courts to vacate a d ef ault judgm ent where the def endant has shown that he has a m eritorious def ense.” BB B uggies Inc. , 150 So. 3d at 102 (¶25) (internal quotation m arks om itted). I n ad d r e s s i n g the def inition of a “colorable def ense,” the Court has explicitly st a t e d that “[ a] colorable def ense i s one that reasonably

m ay be a sserted, given the f acts of the case and t he current law.” T ucker , 1 98 So. 3d at 312 (¶35). Further, “[ a] def

ense need not be com

p elling, be proven to t rial standards, or be supported by sworn evi d e n c e i n o rder to qualif y as a ‘colorable d ef

ense.’.

. . Rather, the def ense m ust be a reasonable one.” Id. (citation om itted). “Indeed, [ th e M i s s issippi Suprem e] Court has held that even a def e nse of ‘questionable’ strength m ay be colorable.” Id. (quoting W

oodruff , 143 So. 3d at 553 (¶18)). ¶34. The chancery c ourt held that Em ery did n ot p resent a “colorable d ef ense” and thus dec i d e d t h e second prong of Rule 60(b)’s three-part b alancing test against Em ery . Upon review of the record and the applicable law, w e f ind that t he chancery c ourt’s r uling on this issue was based on a n error o f law, and theref ore we reverse the chancery court on this issue
f or the reasons addressed below. ¶35. In this case Greater Gree n v i l l e s e e k s r e f orm a t ion o f the warranty deed because, it

1 4contends, the i n c l u s i o n o f the f our additional properties in the deed’s legal property d e s c riptions was a m

u t ual m istake and the result of a scrivener’s error. In s u pport of t h i s
argum ent, Greater Greenville a s s e r t s t h at the option, which l isted the six undisputed properties, was a v alid c ontract f or the sale of land. From t his, G reater Greenville contends that in order f

or the warranty deed to validly convey the f our additional p roperties to Em ery , there n e e d e d to be a written m odif ication of this “ contract f or sale” in s atisf

action of the

statute of f

rauds

. See Miss. C ode Ann. § 15-3-1 (Rev. 2012). According to Greater Greenville, because there w as no such written m odif ication, t he term s of the original option (which Greater Greenv i l l e deem s is a “contract f or sale”) govern the transaction. Greater Greenville contends that t he p u rpose of the warranty d eed was m erely to ef f ectuat e the
convey ance agreed upon by t he parties to that c ontract. Because that contract did not include the f our additional properties, Greater Greenville contends that t he warranty deed should be ref orm ed to exclude them

to correct this “m

u tual m istake.” ¶36. Em ery , on the o t h e r h a n d, asserts t hat the option to purchase w as not a f inal and binding contract f

o r sale, and thus the issue is not one of c ontract m o dif ication, but rather one of deed interpretation. According to Em ery , there was no “ m utual m istake” in the warranty deed’s legal descriptions because af ter viewing the properties, both parties agreed t o include the original six p r operties and the f our additional properties in the sale, as corroborated by the f ollowing statem e n t s i n S pencer’s af f idavit, Greater Greenville’s executive director at the tim e of the sale:
6. [ A]ll o f the properties described in the deed, including 542 South Hinds Street, 509 Roach Stree t , 5 11 Roach Street, and 427 W right Street,

1 5were intended to b e included in t he sale. As the agent f or the com

pany , I, personally , was aware of the inclusion of these properties in the s ale.

. . . . 8. A c c o r d i n g l y , w h e n I s i g ned the deed on April 18, 2011, i t w a s t h e intent of Greater Greenville Housing and Revitalization Association to include a ll of the properties described in t he deed, including 542 South Hinds Street, 509 R oach Street, 5 11 R oach Stree t , a n d 427 W right Street. ¶37. As f

urther explained in the Spencer af f i d a v i t , b o t h parties agreed to include the additional f

o ur properties i n the sale to a ssist Em ery with the l o a n he had taken out to purchase the properties a nd to address t h e pressure that the City of Greenville was putting

on Great e r Greenville to revitalize t he subject p roperties, including the f our additional properties. As such, E m ery contends that there i s n o “m utual m istake” b ecause t he warranty deed that Greater Greenville ex ecuted and delivered to him ref lects the parties’ agreem ent and correctly identif

ies all the property convey e d by Greater Greenville to him , including the
f our additional properties. ¶38. The c hancery

court held in Greater Greenville’s f avor on this issue, f

inding that the relevant contract governing the transaction was the option to purchase, as f ollows:
W i thout a doubt, the contract is t h e O p t i o n to Purchase a greem ent which is s i g n e d by E m ery and Spencer. It identif ies the consideration, and states th e term s of the agreem ent. Although it is not the m ost detailed contract and it f ails to state how long Em ery w as given to obtain f inancing, it is suf

f icient to show the agreem ent between Em ery and Spencer. 7 Any m odif

ication to that contract, the c hancery court f ound, m ust likewise be in writing and

7 T h e ch an cery co u rt a d d ed a f o o tn o te to its o p in io n th at “[ i] t w o u ld s e e m t h a t b etw een M a rch 2 , 2 0 1 1 , w h en th e O p tio n to P u rch ase ag reem en t w as sig n ed an d A p ril l 8 , 2 0 1 1 , w h en th e Warran ty D eed w as sig n ed , E m ery o b tain ed f

in an cin g .” 1 6m eet the requirem ents of a valid contract. The chancery court described the issue bef ore it as f o llows: Although the W arranty Deed is not the contract as Em ery argues, based upon the af f idavit of Spencer and the argum ent of Em e ry , t h e Wa r r a n t y Deed, at best, arguably , could have been intended to be the written e vidence o f Spencer and Em ery ' s m odif

ication of the Option to Purchase agreem ent. Addressing this issue, the chancery court held that the warranty deed was n ot s upported by

new consideration s o it did not constitute a valid m odif ication to the o ption. The chancery

court f urther held t hat any v e rbal agreem ent between Em e ry and Spencer t o include the disputed properties in the sale was barred by t he statute of f r auds. Based on this analy sis, the chancery court held that Em ery had not shown a colorable def ense to Greater Greenville’s deed ref orm ation lawsuit. W e f

ind that the chancery

court’s analy sis on this issue is based upon an error of

law f or the f ollowing reasons. ¶39. As addressed a

bove, Em ery only needs to show on appeal that h e h a s a “ c olorable def ense” to Greater Greenville’s m utual m istake a l legations, which “need n ot be com pelling, [ or] be p r o v e n t o t r i a l standards,” Tucker , 1 98 So. 3d at 312 (¶35), and m ay even be “ of questionable s trength” to pass m uster. I d. Em ery contended bef

ore the chancery court and contends on appeal that the option to purchase w as not a f inal and binding contract. Instead,

as E m e ry contended bef

ore the chancery court, “[ t]he f inal and binding a greem ent between the parties is the ac t u a l W arranty Deed describing all properties [ that] were sold and purchased .” This is a colorable c ontention, a s “[ a] valid and e n f orceable option contract requires: (1) an a dequate description of the property , (2) consideration, and (3) a date when the option m

ust be exercised.” Presten b a c h v
. Collins , 159 S o. 3 d 531, 533 (¶ 9) (Miss.

1 72014). There is no evidence in the record that Em ery paid any c o nsideration f or t he option

to p urchase t he six properties, n or d oes the option contain a recital that any consideration was paid. 8 ¶40. From the p roposition that the warranty deed i s t h e f i n a l a n d b i n d i n g agreem ent between t he parties, Em ery t hen asserted bef ore t he c hancery court a nd asserts on appeal that the warranty

deed controls and that the f o ur a dditional properties were not included due to
“m utual m istake,” which requires Greater Greenville to s how bey ond a reasonable doubt that there has been “ [ a] m istake that is s hared and relied on by b oth part i e s t o a contract.” Elchos v. H

aas , 1 7 8 So. 3d 1 183, 1192 ( ¶25) ( Miss. 2015) (quoting Black’s L aw Dictionary (10th ed. 2014)). As Em ery asserted bef ore the chancery court, he “is prepared to prove that the properties described in the deed were, i ndeed, intended to be i ncluded i n the sale of the property to him .” ¶41. As to t h e p r i n c i p les governing the deed’s interpretation, Em ery asserts that “[ d]eed dis p u t e s are exam i ned under principles analogous t o c o ntracts,” id. at 1 191 (¶24), and “a
person is charged with knowing t he contents of any d ocum ent that he executes.” Andrus v. Ellis , 887 So. 2d 175, 180 ( ¶28) (Miss. 2004) (quoting Russell v. Performance Toyota, Inc ., 826 So. 2d 719, 725 (¶28) (Miss. 2002)). Based on these p rinciples, Em ery asserts that, as

8 T h e o p tio n also d o es n o t co n tain a d ate b y w h ich E m ery w as req u ired to ex ercise th e o p tio n if h e o b tain ed f in an cin g . Wh ere an o p t io n to p u rch ase lan d is co n tin g en t u p o n th e p u rch aser o b tain in g f

in a n cin g , h o w ev er, th e M ississip p i S u p rem e C o u rt h a s h eld th at th e o p tio n -h o ld er m ay e x ercise th e o p tio n w ith in a reaso n ab le tim e th ereaf ter. P resten b a ch , 1 5 9 S o . 3 d at 5 3 3 (¶1 0 ) (“If an o p tio n su b j ect to f in an cin g d o es n o t sp e cif

y w h en t h e sale m

u st tak e p lace, th e co u rt m ay d ecree a reaso n ab l e tim e f o r p erf o rm an ce.”) ( i n t e r n a l q u o tatio n m ark s o m itted ). N ev erth eless, w ith o u t v a lid co n sid eratio n to su p p o rt it, th e o p tio n w as n ev er en f o rceab le at all. 1 8the grantor, Greater Greenville had the d uty “to learn and know [ the deed’s] c ontents bef ore [ it] sign[ ed] and deliver[ ed] it.” Alliance Trust Co. v. Armstrong , 185 Miss. 148, 163, 186
So. 633, 63 5 ( 1 9 3 9 )

. According to Em ery , G reater G reenville’s f ailure to read and understand the warranty deed bef ore executing a n d d elivering it negates i ts attem pt to ref orm the warranty

deed based upon m

utual m istake. ¶42. Apply ing the “colorable def ense” standard and the legal principles discussed above,

we f ind that Em ery has shown that he possesses a colorable def e nse that the w arranty deed, rather than the option to purchase, controls in determ ining what prop e r t y was c onvey e d to him , and that the f

our additional properties in the deed’s legal descriptions w ere not included due to “m utual m istake.” The chancery c ourt’s determ i nation to the contrary was based on an error of

law. ¶43. W e acknowledge G reater Greenville’s as s e r t i o n s t h a t a f t e r t h e p r operties were
convey ed to Em e ry , he m ay have acted inconsistently with his belief that h e owned the f our additional properties. For e xam ple, Em ery does not dis p u te that a f ter the sale, Greater Greenville continued to c ollect rent f rom the t enants living in the f our additional properties. The record also shows t hat Greater Greenville alleges it paid insurance o n t he f o ur additional hom es and perf

orm ed m aintenance and m ade im provem ents to these hom es. According to Greater Greenville, these actions were done without com m ent o r interf e r ence by Em ery . 9 W e

9 G reater G reen v ille relies o n K elly v. B a rry , 1 1 5 S o . 3 d 1 3 1 (M iss. C t. A p p . 2 0 1 3 ), in assertin g th at th ese f

a cts also d e m o n s trate th at E m e ry h as n o c o lo r ab le d ef en se to G reater G r een v ille’s d e e d r e f

o rm a tio n law su it. In K

elly , th e d eed at issu e m istak en ly co n tain ed lan g u ag e in th e leg al d escrip tio n th at co n v ey ed p ro p erty en co m p a ssin g tw o s ep arate h o m es f ro m B arry t o K e lly , w h en B arry o n ly i n ten d ed to co n v ey o n e h o m e. Id

. a t 1 3 3 (¶5 ). A f ter th e tran sactio n , B arry ren o v ated th e seco n d p ro p erty , an d p aid all o f th e u tilities, tax es, an d 1 9also a cknowledge, however, that the record shows that E m ery paid t he property taxes on the

f our additional properties i n 2012 a nd 2013, a f ter the sale, though he did not pay the property
taxes on these properties in 2014 or 2015. In any e vent, as addressed above, we are not here

t o a d d r e s s the m erits of t his l awsuit, but rather we are to determ ine whether the chancery

court erred in determ ining that Em ery f a iled to show that he had a “colorable def ense” to Greater Greenville’s ref

orm atio n l a wsuit. For the reasons addressed above, we f ind that
Em ery h as shown a colorable def ense, a nd we theref

o r e reverse the chancery court’s judgm ent on this issue.

C. Prejudice to Greater Greenville ¶44. W e f

ind no abuse o f discretion in the cha n c e r y c o u r t ’ s d eterm i nation that Greater Greenville will n ot suf

f er the ty pe of prejudice contem

plated by the “prejudice” prong under the Rule 60(b) b alancing test. As the chancery court determ i ned, t h e e n t r y o f d e f ault was f iled t wo day s af

ter the answer was due, and the def ault judgm ent was entered one w eek af ter the answe r w a s d u e. A little m ore than three weeks later, Em ery ’s counsel entered an

in su r an ce p rem iu m s o n th at p ro p erty

. Id

. at 1 3 2 (¶4 ). B arry so u g h t to ref o rm th e d e ed w h en h e d isco v ered th e erro r

in th e leg al d e scrip tio n . I d

. at 1 3 3 (¶6 ).
T h o u g h th e ch an cery

co u rt o rd ered ref

o rm atio n o f t h e d eed at issu e in K elly , it w as af ter a trial o n th e m erits. Id

. at 1 3 3 (¶¶8 -9 ). T h is f acto r a lo n e d istin g u ish es K elly f ro m th e case h ere, w h ere, a s ad d ressed a b o v e, t h is C o u rt’s ro le is to assess o n ly w h eth er E m ery h as sh o w n a co lo rab le d ef

e n se to set a sid e a d ef

au lt j u d g m en t u n d e r an en tirely d if f eren t leg al stan d ard

. T

u cker , 1 9 8 S o . 3 d at 3 1 2 (¶3 5 ) (A d ef en se “ n e ed n o t b e co m

p el l i n g , [ o r ] b e p ro v en to trial stan d ard s
. . . in o rd er to q u alif y as a ‘co lo r ab le d ef

en se.”’). F u rth er, ev en o n th e reco r d b ef

o re u s, K elly is f a ctu ally d istin g u ish a

b le. U n l i k e E m ery , K e lly h ad n o ev id e n c e , o th er th an h er o w n t estim o n y , th at th e p arties in ten d ed to c o n v ey b o th p r o p erties, an d K elly h ad co llected ren t f ro m th e ten an ts in th e o t h er p ro p erty an d tu rn ed th at ren t o v er to B arry . Id

. at 1 3 5 (¶1 6 ). 2 0appearance by f iling the m otion to set aside the def ault j u d g m ent. Thus, Em ery e ntered an appearance approxim ately one m o nth late. ¶45. As the c h a

n c ery c ourt f

ound, Greater Greenville did not show any prejudice it suf f ered

as a result of the delay

. I nstead, Greater Greenville argued that it would suf f er prejudice if the def ault judgm ent were set aside bec a u s e a f t e r obtaining the def

ault judgm ent it m ade changes regarding the property ’ s tax c lassif ication and the indebtedness on the disputed property , and because it has p aid the delinquent taxes. In m aking these c hanges , Greater Greenville incurred expenses. “[ P]rejudice[ , however,] does not resu l t f r o m ‘the loss of rights that w ere o btainable only by def ault.’ ” B B B u

ggies Inc. , 150 S o. 3d at 104 (¶31) (quoting In r e Estates of Gates , 876 So. 2d 1059, 1065 (¶18) (Miss. Ct. A pp. 2004)). Based
upon the r ecord and the applicable l a w , we f ind that the chancery court did not abuse its discretion in determ i ning that there wa s n o p rejudice to Greater Greenville under the “prejudice” prong of

the Rule 60(b) balancing test. ¶46. In c onclusion, though Em ery did not show good cause f o r his def a ult, an application of t he law t o this case requires that the def ault j udgm ent b e set aside because we f ind that
Em ery has shown he has a colorable def ense under t he applicable law, and Greater Greenville will not s uf

f er prejudice as that term is used in the Rule 5 5(c) and 6 0(b) b alancing

test context. 10 W e r everse the chancery court’s judgm ent and rem and this c a s e f or f urther proceedings consistent with this opinion.

1 0 B B B u g g ies In c
. , 1 5 0 S o . 3 d at 1 0 2 (¶2 4 ) ( “[ L ] a ck o f g o o d c au se alo n e w i l l n o t p rev en t th e C o u rt f

ro m s ettin g asid e a d e f

au lt j u d g m en t if th e o th e r tw o f a cto rs w eig h in f av o r o f settin g it asid e.”). 2 1¶47. REVERSED AND REMANDED.

GRIFFIS, C.J., BARNES, P.J., WILSON, GREENLEE, WESTBROOKS AND TINDELL, JJ., CONCUR. McDONALD, LAWRENCE AND McCARTY, JJ., NOT PARTICIPATING.

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