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: MANDATE ISSUED: BEFORE LEE, C.J., CARLTON AND WESTBROOKS, JJ. CARLTON, J., FOR THE COURT: ¶1. T h i s c a s e c o n c e r n s a d e f a u lt judgm ent entered in a l awsuit in which Greate r Greenville Housing & Revitalization Association ( “Greater Greenville”) sought to ref o r m

a warranty deed co n v e y i n g certain property to Odis Em ery in 2011. O ver f our y ears af

ter executing and d e livering the warranty deed to Em ery , G reater Greenville discovered that the legal descriptions in th e w a r r a n ty deed contained f our a dditional properties t hat Greater Greenville claim s it did not intend to convey

. ¶2. Af ter it was unable to res o l v e t h e ma tter w ith E m ery , Greater 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 error. Em ery was s erved with t he sum m ons and the

com plaint but f

ailed to tim ely f

i l e a n answer. Greater Greenville o btained a def ault j u d g m ent, and just over three weeks later, Em ery f iled his m otion t o s et aside the def ault judgm ent. ¶3. 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 Civil Procedure. 1 The c hancery court f ound that although
Greater Greenville did not s how it would be p rejudiced if the def ault judgm ent were set aside, Em ery

had f a iled 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. ¶4. E m e r y a p p e als, a rguing that the chancery court’s ref u sal t o set aside t h e d e f

a u l t judgm ent was an a

buse o f discretion because he had shown b oth good cause f or his def ault, and that he had a colorable def e nse to Greater Greenville’s lawsuit. ¶5. W e f

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

on the g ood cause prong of the R ule 60(b) three-prong balancing test; or in f i nding against
Greater Greenville on the preju d i c e p r o n g . W e f ind, however, that the record shows that
Em ery d em onstrated he h ad a c olorable d ef ense to Greater Greenville’s lawsuit, and that the chancery court’s determ ination that he did not have a colorable def ense was based on an error of l aw. Accordingly , based on the record and t h e a p p l icable law, we hold that t he def ault

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 ).

2judgm 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 and rem and this case f or f urther proceedings.
FACTS ¶6. Greater Greenville is a Mississippi non-prof i t c o r p o r a t i o n l o c a t ed i n Greenville, Mississippi. O dis Em e ry lives in Hollandale, Mississippi. On March 2, 2011, Em ery and
Greater G reenville executed an option to purchase certain properties. Fredrick Spencer was the Executive Director of Greater Greenville at 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 & Revitalization Associati o n 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. ¶7. T h e option contains n o recital that Em ery paid any consideration f or it, and there i s

no evidence in the record t hat Em ery did so. The option also does n ot contain a tim e f r am e within which Em ery

m ust exercise the option upon m eeting the f inancing contingency

. ¶8. According to Em ery , and as supported by Spencer’s af f idavit, Em e ry and S pencer, as the agent f

or Greater Greenville, viewed the original s i x properties a n d then agreed to include
f our additional properties in the sale. As s et f o rth in the Sp e n c e r a f

f i d a v it, the reason f

or

3including the f our additional properties was to assist Em ery with the loan he had taken out

to purchase the property 2 —and t o a ddress the pressure that the City o f Greenville was putting

on Greater Greenville to revitalize t he subject p roperties, including the f our additional properties. These f

our a d d itional properties included the hom es and surrounding 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 ¶9. On April 18, 2011, E m ery p aid G reater Greenville $ 75,000.00, and Grea t e r G r e e n v i l l e executed and delivered a warranty deed convey ing certain real p roperty to Em ery . The legal
p r o p e r ty descriptions in the w arranty d eed c ontained all ten properties, the original s i x properties listed in the option, an d t h e f o u r additional properties listed above, which were described by lot and b lock designations and m etes and bounds des criptions. A dditionally , t h e l e g a l descriptions f

or the properties located a t “464 Hughes Street” and “415-4 1 7 Slaughter Lane” are labeled in t he deed; there are notations i n the m a r gin f or properties on
“W right S treet,” “ S. Hinds” and “ North Street,” but they contain no specif ic street-num

ber ref erences. There were no n o tations or labels in the warranty deed regarding the legal description encom

passing the Roach Street properties. 3

2 T h o u g h th e reco rd d o e s n o t co n tain d o cu m en tary ev id en c e th at 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

. 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

. 4¶10. Over f o ur y ears a f

ter convey ing the p roperty to Em ery , Greater 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 o riginal six properties listed i n t he option and the f our additional properties. By a letter dated Decem ber 23, 2 015, Greater Greenville

attem pted to resolve what it believed 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 letter, Greater Greenville set out what it believ e d w ere the f a cts and issues r elating to the deed’s legal descriptions and detailed an of f e r to resolve t he m atter without the necessity of litigation. ¶11. The record contains the a f f idavit of W illie Bailey , in which h e said t hat he withdrew
f rom r epr e s e n t i n g E m e ry on or about Decem b er 23, 2015, but bef

ore t hat tim e he had
convey ed to Greater G reenville’s counsel that Em ery disputed the m atter and would def end against any f

u ture litiga tion regarding the m atter. Upon l earning that Baily no longer represented Em e ry , Greater Greenville’s counsel contacted E m e r y directly b y a letter dated January 14, 2016, r eiterating t he f acts an d i ssues set out in the earlier letter i t had sent to Bailey and proposing settlem e nt. ¶12. W h en Greater G reenville did not received a response f rom Em ery , it f

iled a C om

plaint

to Ref orm Deed and f

or Other Relief in the Chancery Court of W ashington County , Mississ ippi, 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. Greater Greenville sought, am ong other things, to obtain a decree

5ref

orm ing the deed due to a m utual m istake and scrivener’s error and co n f i r ming title in
G r e ater Greenville f

or the f o u r additional properties, nam ely the h om es and surr o u n d i n g property located at 542 S outh Hinds Street, 509 Roach Street, 511 Roach S tr e e t , a n d 427
W r ight Street, in Greenville, Mississippi. ¶13. Eme r y w a s p e r s o n a lly served with the s um m ons a nd a copy of the com plaint on January 28, 2016. 4 I t 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. ¶14. On March 2, 2016, counsel f or Greater Greenville f

iled a request f

o r e ntry of

def ault against E m ery . On t hat sam e day the clerk ente r e d a d ef ault a gainst Em ery f

or f ailure to
appear, plead, or otherwise def end the action. The next day , Greater Greenville f i l e d its

m otion f or def ault judgm ent and o ther 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 orm s o f r e l i e f

, the chancery court granted a def a ult judgm e nt against Em ery ; ref orm e d 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 o f Em ery ’s interests. 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

. 6f

inal judgm ent was am ended t h e next day when it was discovered that part o f the legal description had been om i tted 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 ¶15. Im m e diately f

ollowing the entry of the d ef ault j udgm ent, Greater Greenville had the
f our additional properties classif ied as tax exem

pt, paid t h e d e l i n quent taxes on those
p r operties, and h ad Planters Bank reinstate the d eed of t rust w ith G reater Green v i l l e a n d release its deed of

trust with Em ery

as to the f

our additional properties. ¶16. On April 1, 2016, just o v er three weeks af t er entry of the def

ault judg m e n t , Em ery f iled his m otion to set aside the def ault judgm ent and f

o r leave to f

ile an answer. Counsel
f or Great e r G r e e nville received a copy of t his f iling on April 4, af

ter the actions it took in accordance with the def

a u l t j udgm ent had already t aken place. Greater Greenville f iled a
response to Em ery ’ s m otion on April 15, and t he m atter w as set f or an August 23 hearing.
Four day s bef

o re the hearing, Em ery f

iled h is r ebuttal supporting his m otion to s et aside the def ault judgm e nt. ¶17. Af ter conducting a h earing, the chancery court e ntered its f inal order deny ing Em ery ’s

mo t i o n to set aside the d ef ault judgm e nt. The chancery court f i rst f ound that the def

a ul t judgm ent was not v oid based u p o n E mery ’s argum ent that 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

5 F o r clarity , w e ref

er to th e M arch 9 am en d e d f in al j u d g m en t as th e d ef

au lt j u d g m en t.

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. 7test 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 60(b). Nam e ly , the chancery court assessed (1) whether Em e ry had “good cause” f or his def ault; (2) whether E m ery h ad a “c o lorable def ense” to Greater Greenville’s lawsuit; and (3) t he nature and extent o f any prejudice to Greater Greenville if the def a ult judgm ent were
set a s ide. BB Buggies, Inc. , 1 50 So. 3d a t 101 (¶23). Under this test, the c hancery court held that although Greater Greenville w ould 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 show good cause f or his def ault, a n d h e d i d

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. ¶18. 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 d i s c r etion in f

ailing to s et aside the def ault j udgm ent because
Em ery showed (a) he had l e g itim 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
I. Standard of Review ¶19. “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.” T

u c k e r v
. W illiams , 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

8court should exercise its d iscretion within the strictures of Rules 5 5(c) a nd 60(b), along with

the criteria set f

orth b y this Court.” Id. The grant o r denial of a m otion to set aside an entry of def ault or a def

ault judgm ent is reviewed f or 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 r everse.” Id. (citing Allstate Ins. Co. v. Green , 794 S o. 2d 170, 173 (¶8) (Miss. 2001)). Further, t h e M ississippi Suprem e Court “ has been clear that def ault judgm e nts are not f

a vored.” BB Buggies, Inc

. , 150 So. 3d

at 1 01 (¶22) (inte r n a l q u o tation m ark om itted). 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 ¶20. On appeal, Em ery contends that the chancery c ourt abused its discretion in f ailing to f ind he showed good cause to “set aside the entry of def 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 t his f

inding in its f

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

o llows: Emery does not seek to set aside th e c l e rk’s entry of default, he seeks to s et aside a default judgment

. Miss. R

. Civ. P. Rule 55(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 entered, 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). ¶21. 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

9he did not raise t his issue in the chancery court. Bender v. N. Meridian Mobile H ome Park , 636 So. 2d 385, 389 (Miss. 1994) (“[ A] trial j u d g e c a n n o t b e put in error on a m atter not presented to him

f or his 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 plead but press his point in the trial court.”); Ammons v. C ordova Floors, Inc. , 904
So

. 2 d 1 8 5 , 1 92 (¶25) (Miss. Ct. App. 2005) (f inding issue procedurally barred because it was not raised in the trial court). ¶22. W e now turn to address Em ery ’s argum ents that the def a u l t j u d g m ent s hould 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 6 0 ( b ) i n Determ ining Whether a Default Judgm e nt Should be Set Aside ¶23. As the M ississippi Suprem e Court h as explained, “[ a]ccording to Rule 5 5(c), a def ault judgm ent m ay be set aside ‘[ f ] o r good cause shown’ and i n accordance with Rule 60(b).”
B B B u g g i es, Inc

. , 150 So. 3d at 101 (¶23) (quoting M.R.C.P. 5 5(c)). The Court has articulated a three-pronged balancing test the trial court m ust apply in determ i ning whether to set aside a judgm ent pursuant to Rule 60(b): (1) the natur e and l egitim acy o f the def endant’s reasons f

or his def ault, i.e. whether t he def

endant has good cause f

or d ef ault, (2) whether the def

endant in f act has a colorable def

ense to the m erits of the claim , and (3) the n ature 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 appl y 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

1 0decision is based upon an error of law, however, we will reverse. Tucker , 198 So. 3d 299, 309 (¶24).
A. Good Cause ¶24. The chancery c ourt held that Em ery f ailed to show “good cause” f o r his def ault, and thus did not m eet t he f

irst prong of Rule 6 0(b)’s three-part balancing test. W e agree. Based

on t he record and t he applica b l e l a w , the chancery court did not abuse its discretion in

m aking this determ ination. See Pittman , 501 So. 2d at 386-88. ¶25. 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. E m e r y 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 process of the case. Im m ediately upon being served, E m ery began seeking counsel to r epresent h im

. 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. ¶26. Though E me r y ’ s a nswer 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 Em ery c o n t a c ted
Greater Greenville or its counsel, the c lerk, or the c o urt about this m atter—even though the record ref lects that Em ery kn e w t h e nam e and address o f Greater Greenville’s counsel, as Em ery had just received a proposed settlem ent letter f rom him in January

2016. ¶27. According to t he statem ents in Em ery ’ s a f f idavit, he w as ref

e rred to Renetha Frieson
in March. She was on leave until M a r c h 2 1 , s o on March 22 Em ery retained Frieson to represent him in this m atter. Her f irst appearance in this case was on A pril 1 , when she f iled

1 1the m otion to set aside the def ault judgm ent on Em ery ’s behalf

. ¶28. Under sim ilar f

acts, t he Mississippi Su p r e me C o u r t i n P i t t m a n f o und that the def endant truckdriver there had shown no good cause f o r def ault: Hardin was served w ith a sum m ons which advised him i n no uncertain term s tha t he m ust answer within thirty day s or suf f er d ef ault.

. . . Assum ing t hat Hardin could count to thirty and had s om e rudim entary f am iliarity with the Julian calendar, t he s u m mo ns instructed h im t hat his a nswer w as d ue on Decem ber 12, 1984. That day cam e and p asse d a n d , insof ar a s t he record ref lects, Hardin did nothing.
P i ttman , 501 So. 2d at 386-87. In addition to f inding that the sum m ons plainly instruc t e d 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 plaintif 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 conf

usion o v e r whether Hardin had insurance c overage, t he Court held, did not justif

y Hardin’s f

ailure to answer the com

plaint. Id. ¶29. The s um m o ns Em ery received in this case contained the sam 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 ou.” 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 that he attem

pted to obtain counsel, caselaw ref lects that this d o e s n o t excuse him f rom addressing the com

p l a i n t i n s o me way bef

ore a n answer w as due. Pittman , 501 So. 2d at 386-88. Indeed, even where a def endant obtains c o u n s e l , g ood cause f or def ault is still lacking where the d e f

endan t f a i l s to f ollow-through and ensure an answer is f iled. See

1 2W

oodruff v. Thames , 1 4 3 So. 3d 546, 551, 553 (¶¶8, 15-16) (Miss. 2014) (f inding no “good
cause” f or d e f a ult where, although def

endant was i nitially diligent in taking the com plaint served upon him to an attorney b e f o r e the thirty day s to answer had expired, he never f ollowed up to see that an a nsw e r w a s f i l e d); H & W Transfer & Cartage Serv., Inc. v. Griffin , 511 So. 2d 895, 899 (Miss. 1987) (f inding that although def

endant’s initial steps

were “reasonable and prudent,” it “thereaf ter dropped the ball” by f ailing to f ollow-up and

ensure the com

plaint was answered) ; Tippah Cty. v. Childers , 21 So. 3d 658, 661 (¶12) (Miss. Ct. App. 2 0 0 9 ) ( “ Tippah County d ropped t he ball a f

ter it was p roperly served with
process and delivered a copy of the sum m ons and com plaint to its insurance agent. Tippah County was the n am ed def endant i n the com

plaint, and i t was T ippah County ’s responsibility

to m ake sure that an answer was f iled.”). ¶30. B a sed on the r ecord and the applicable law, we f ind no a b use of discr e t i o n i n t h e 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 c om plaint i n s om 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. ¶31. “However, lack of g ood cause alone will not prevent the Cou r t f rom setting aside a def ault judgm ent if t he o ther t w o f a c t o r s w eigh in f

a v or o f setting it a side.” B B Buggies,
Inc. , 150 So. 3d at 102 (¶24) (citing Am. Cable Corp. v. Trilogy Commc’ns, I nc ., 754 So. 2d 545, 556 (¶44) (Miss. Ct. App. 2000)). W e address the rem a ining two f actors below.
B. Colorable Defense ¶32. The Mississippi Suprem e Court has “held unequivocally t hat the second f actor [ in the

1 3Rule 6 0(b) balancing t est], the presence of a c olorable def ense, outweighs the other two, and [ the Supreme C o u rt 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 d ef e n se.” BB Buggies, Inc. , 150 So. 3d at 102 (¶25) (internal quotation m arks om itted). I n addressing the def initio n o f a “colorable def ense,” the Court has exp l i c i t ly stated that “[ a] colorable def ense i s one that reasonably

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

ense need not be com

pelling, be proven t o trial standar ds, or be

s u p p o r t e d b y sworn evidence in order to qualif y as a ‘colorable d ef

ense.’.

. . Rather, the d e f e nse m ust be a r easonable one.” Id. ( citation om itted). “Indeed, [ the M ississi p p i Suprem e] Court has held that even a def ense o f ‘questionable’ strength m ay be colorable.” Id. (quoting W

oodruff , 143 So. 3d at 553 (¶18)). ¶33. The chancery c ourt held that Em ery did not present a “colorable def e n s e ” and thus decided the second prong o f R u l e 6 0(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 w e reverse the chancery court on this issue
f or the reasons addressed below. ¶34. I n t his case Greater Greenville s eeks ref orm a tion o f the w arranty dee d b e c a u s e , i t contends, the inclusion of the f our additional properties in the d e e d ’ s l e gal property descriptions was a m

utu a l mi s t a ke and the result of a scrivener’s e rror. In support of this
argum ent, Greater Greenville asserts that the o p t i o n , w h ich l isted the six undisputed properties, was a v alid contract f or the sale of l and. From t his, G reater Greenville contends

1 4that in order f or the warranty d eed to validly convey the f our additional properties to Em ery , there needed to be a written m odif ication of this “contract f or sale” in satisf

action o f t h e
statute of f

rauds. See M iss. Code Ann. § 15-3-1 (Rev. 2012). According t o Greater Greenville, because there was no such written m odif ication, t he term s of the original option (which Greater Greenville deem s is a “ contract f or s a le”) govern the transact i o n. Greater
Gre enville c ontends that the purpose of t he warranty deed was m erely to ef f ectuate 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 c ontends that t he warranty deed should be ref orm ed to exclude them

to correct this “m

u tual m istake.” ¶35. Em ery , on the other hand, asserts that the o p t i o n t o 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 , t here was no “m utual m istake” i n t he warranty deed’s legal descriptions because af ter v iewing the properties, both parties agreed to include the original six properties and the f our additional properties in the sale, as corroborated by the f ollowing statem ents in Spencer’s af f i d a v i t , 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 Street, 511 Roach Street, a n d 427 W ri g h t Street, were intended to be included in t he sale. As the agent f or the com

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

. . . . 8. A c c o r d i n g l y , w h e n I signed the deed on A pril 18, 2011, i t w a s t h e intent of Greater Greenville Housing and Revitalization Association to include all of the properties described in t he d eed, including 542 South

1 5Hinds Street, 509 R oach Street, 5 11 R oach Stree t , a n d 427 W right Street. ¶36. A s f

urther explained in the Spencer a f f idavit, both parties agreed t o i n c l u d e t h e additio n a l f

our properties in the sale to assist Em ery with the loan he had taken out to purchase the pr o p e r t ies and to a ddress the pressure that the City of Greenville was putting

on Greater Greenville to revitalize the subject prop e r ties, including the f our additional properties. As such, Em e ry contends that there is no “m utual m istake” b ecause t he warranty deed that Greater Greenville executed and delivered to him ref lects the parties’ agreement and correctly identif

ies all the property c onvey ed by Greater G r eenville to him , including the
f our additional properties. ¶37. The chancery 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 d o u b t , t h e contract is the Option to Purchase a greem ent which is signed by E m ery and Spencer. It identif i e s t h e consideration, and states the term s of t he a greem ent. Although it is not the m ost detailed contract and it f ails to state how l ong E m ery w as given t o obtain f inancing, it is suf

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

ication to t hat contract, the chancery court f ound, m ust likewise b e in writing and

m eet the requirem ents of a valid contract. The chancery court described the issue bef ore it as f o llows: Although t he W arranty Deed i s not the contract as Em ery a rgues, b ased upon the af f i d a v i t o f Spencer and the a rgum ent of Em ery , the W arranty Deed, at best, arguably , could have been intended to be the written e vidence o f Spencer

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 6and 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 option. 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 the statute of f rauds. B ased on this a naly sis, the chancery court held that Em ery had not shown a colorable def ense to Greater Greenville’s deed ref o rm ation lawsuit. As discussed below, we f ind that the chancery court’s analy sis on this issue is based upon an error of law. ¶38. In addressing t he f indings of the c ourt b elow, we a cknowledge f irst t hat th e p a r t i e s in this case did not create a valid opti o n t o p u r c hase. “A valid and enf o rceable option

contract r equires: (1) an adequate description of the p roperty , (2) consideration, and (3) a date when the option m

ust be e xercised.” Prestenbach v
. C ollins , 159 So. 3d 531, 533 (¶9) (Miss. 2014). There i s no e vidence in the r ecord that Em ery paid a ny consideration f or the option to purchase the six properties, no r d o e s t h e option contain a recital that any consideration was paid. 8 ¶39. Second, even if t he p arties had f orm ed a v a l i d o p t i o n , a n option to purchase is a unilateral contract that i s bi n d i n g o nly on t he p rom issor (Greater Greenville); there is no

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 7obligation on the holder (Em ery ) to exercise it. An option, in and of itself , i s n ot a m

utually enf orceable contract f

or s ale. Clinton S

erv. Co. v. T

hornton , 2 33 M iss. 1 , 9-10, 100 So. 2d 863, 866 ( 1958); s ee Prestenbach , 159 So. 3d at 5 33 (¶9) ( citing cases); F airchild v. Bilbo , 166 So. 3 d 601, 605 (¶10) (Miss. Ct. A pp. 2015). A s the M ississippi Suprem e C ourt has explained: The doctrine of m

utuality is inapplicable t o unilateral contracts. If a prom issor has received suf

f icient consideration, his prom ise is binding, even though the consideration is not a prom ise. Hence an option s u pported by a consideration is valid even though the h older is not obligated to exercise it. The essence of an option contract is that it is not m u tual. . . . [ T ]here is n either m utuality of obligation or of r em edy i n a unilateral contract. W here t he prom issee had p aid a c o nsideration f

or the option, he has f

urnished that elem ent necessary to m ake it binding upon the prom issor-optionor. Clinton Serv. Co. , 233 Miss. at 9-10, 100 So. 2d at 866 (citations om itted). ¶40. Further elaborating on this issue, one com m entator explains: The traditional view regards an option as a unilateral contract which b inds the optionee to do n o thing, but grants him or her the right to accept or reject the of f er in accordance with its term s w ithin the tim e and in the m anner specif ied in the o ption. T hus, the optionee has t he o pen discretion to take or t o leave the proposal. An option t o purchase or to sell is not itself the contract to purchase or to sell

. . . . Its outstanding f actor i s that the optionee is not bound until it acts on the option one way or another. Richard A. Lord, W

illiston on Contracts § 5:16 (4th ed. 2007). ¶41. Based u

pon t he record and t hese l egal principles established i n the precedent, we f ind that the chancery c ourt erred in determ ining t hat Em ery h ad not a t least shown a colorable def ense that the option to purchase was not a contract f or sale governing the transaction in this case. ¶42. Third, under the m erger do c t r i n e , “ [p ] r e v i o u s n e g o t i a t i o n s or contracts are m erged into

1 8a d eed of convey ance.” Knight v. M cCain , 531 So. 2d 590, 5 95 (Miss. 1988) (discussing that the “doctrine of m erger is f irm ly ingrained in Mississippi law” ) ; see Conservatorship of
Estate of Moor ex rel. Moor v. State , 46 S o. 3d 849, 8 53 (¶13) (Miss. Ct. App. 2010) (f inding that th e “[ warranty ] deed extinguished, or m e rged, the provisions in the prior options contract”). W e recognize that Greater Greenville’s c laim o f m u tual m istake is an e xception to the m erger d octrine, see, e.g. , Penfield v. Cook , 355 S o. 2d 1104, 1105-06 (Miss. 1978), but this appeal only concerns the viability of E me r y ’ s d e f ense in the c o ntext of a def ault judgm ent. As such, we do not address the m erits of this case “ other than to point out that in the interest o f protecting the need f or certainty in land transactions, [ the Mississippi Suprem e Court has] long h e ld a c om plainant, upon a l legations of m utual m istake, to the heavy burden of proof b e y ond a reasonable doubt.” Id. at 1106; see Elchos v. Haas , 178 So. 3d 1183, 1192 (¶25) (Miss. 2015). ¶43. As addressed a

bove, Em ery only n e e d s t o s h ow on appeal that h e has a “colorable def ense” t o Greater Greenville’s m utual m istake allegations, which “need not be com pelling, [ or] be proven t o trial standards,” Tucker , 198 S o . 3 d a t 3 1 2 (¶35), and m ay even be “ of questionable strength” to pass m uster. Id. In this case, Em ery asserts that the warranty deed controls, and the f

our additional properties were not i nclu d e d b y “ mutual m istake,” which requires Greater Greenv i l l e t o s h ow, b ey ond a reasonable doubt, that there has been “[ a]

m istake that is shared and r elied on by both p arties to a c ontract.” Elchos , 178 So. 3d at 1192 (¶25) (quoting Black’s Law Dictionary (10th ed. 2014)). ¶44. As to the principles governing the deed ’ s i n t e r p r etation, Em ery asserts that “[ d]eed

1 9disputes are exam ined under p rinciples anal o g ous to contracts,” id. at 1191 ( ¶24), and “a

person is charged with k

n owing the contents of any docum ent that h e executes.” A ndrus v. Ellis , 887 So. 2d 175, 1 80 (¶28) (Miss. 2004) (quoting Russell v. Performance Toyota, Inc ., 826 So. 2d 719, 7 25 (¶28) (Miss. 2002)). From t h i s , Em ery asserts that, as the grantor, Greater G reenville had the duty “to learn and know [ the deed’s] contents bef ore [ i t] sign[ ed] and deliver[ ed] it.” Alliance Trust Co. v
. Armstrong , 185 M iss. 1 48, 163, 186 So. 633, 635 (1939). A ccording to E m ery , Greater Greenville’s f ailure to r ead a n d u n d e r stand the warranty deed bef

ore executing and delivering it negates its attem pt to r ef orm the warranty deed based upon m

utual m istake. ¶45. 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 p u r c hase, controls i n d eterm ining w h at property 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 c hancery court’s d eterm ination to the contrary was based on an error of

law. ¶46. We a c k n o w l e dge Greater Greenville’s a ssertions that af ter the p r o p e r t i e s w e r e
convey ed to Em e ry , he m ay have acted inconsistently with his belief t hat he owned the f our additional properties. F or exam ple, Em ery does not dispute that a f ter the sale, Greater Greenville continued to c ollect rent f rom the tenants living in t he f our additional properties. The record also shows that Greater Greenville alleges i t paid insurance on the f o ur additional hom es and perf

o rm ed m aintenance and m ade im provem e nts to these hom es. According to

2 0Greater Greenville, these actions were done w ithout com m e nt or interf erence b y Em ery . 9 W e also acknowledge, however, that the record shows that Em 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

to address the m erits of this lawsuit, but rather w e are to determ ine whether t h e c h a n cery
court erred in determ ining that Em ery f a iled to show that he had a “colorable def ense” to Greater Greenville’s re f

o r mation lawsuit. For the reasons addressed above, we f ind that
Em ery has shown a colorable def ense, and we t heref

o re reverse the chancery court j udgm ent on this issue.
C. Prejudice to Greater Greenville ¶47. W e f

ind no abuse o f discretion in the chancery court’s d e t e r mi n a t i o n that Greater

9 G reater G reen v ille relies o n K e lly 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 eed ref

o r ma t i o 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 elly , w h en B arry o n ly in t en d e d 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 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 1Greenville will not suf f er the ty pe of prejudice contem

p lated by the “prejudice” prong under the Rule 60(b) b alancing test

. A s t h e c h a ncery court determ i ned, the entry of def ault was f iled t wo day s af

ter t he answer was due, and the def ault judgm ent was entered one w eek af ter the answer was due. A little m ore than t hree weeks l ate r , E me r y ’s counsel entered an
appearance by f

i l ing t he m otion to set aside t he d ef ault judgm ent. Thus, Em ery e ntered an appearance approxim ately one m o nth late. ¶48. A s t

h e chancery c ourt f

ound, Greater Greenville did not show any prejudice it suf f ered as a result of

the delay

. Instead, G reater G reenville argued that it would suf f er prejudice if the def a u l t j u d g m ent were set aside because af ter obtaining the def

ault judgm ent it m ade

c h anges regarding the property ’s tax classif ication and the indebtedness on the dispute d property , and because it has p aid th e delinquent taxes. In m aking these changes, Greater Greenville incurred expen s e s . “[ P]rejudice[ , however,] d oes not result f rom ‘the loss of rights that we r e obtainable only by def ault.’” BB Buggies, Inc. , 150 So. 3d a t 104 (¶31) (quoting In r e E

states of Gates , 876 S o. 2d 1059, 1065 (¶18) (Miss. Ct. A pp. 2004)). Based
upon the r ecord and the applicable law, we f i nd that the chancery c ourt did n ot a b u s e its discretion in determ i ning that there was no p r e j u dice to Greater Greenville under the “prejudice” prong of

the Rule 60(b) balancing test. ¶49. In c onclusion, though Em ery did not show good c ause f or his def ault, an application of t he law to this case r equires that the def ault j udgm ent b e set aside because we f ind that
Em ery h a s 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

2 2test context. 10 W e r everse the chancery co u r t’s judgm ent and rem and this case f or f urther proceedings consistent with this opinion. ¶50. REVERSED AND REMANDED. LEE, C.J., I RVING AND GRIFFI S, P.JJ., BARNES, FAIR, WILSON, WESTBROOKS AND TINDELL, JJ., CONCU R . GREENLEE, J., CONCURS IN PART AND IN THE RESULT WITHOUT SEPARATE WRITTEN 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 ] ack o f g o o d cau se alo n e w il 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 3