IN THE COURT OF APPEALS OF TENNESSEE

AT KNOXVILLE

April 19, 2010 Session

DISCOVER BANK v. JOY A. MORGAN

Appeal from the Circuit Court for Sevier County

No. 2006-0172-II Richard R. Vance, Judge

No. E2009-01337-COA-R3-CV - FILED MAY 19, 2010

This lawsuit began as a collection claim filed by Discover Bank (“Discover”) against Joy A.

Morgan (“Morgan”) for $16,341.52. Discover claimed Morgan owed this amount on a credit

card originally issued to Morgan’s husband, now deceased. Morgan filed an answer and

counterclaim, asserting a claim for libel as well as claims pursuant to the federal Fair Credit

Reporting Act, 15 U.S.C. § 1681, and the Tennessee Consumer Protection Act, Tenn. Code

Ann. § 47-18-101, et seq. Morgan’s attorney gave Discover’s original attorney an extension

of time in which to file an answer to the counterclaim. After this extension of time had run,

Morgan’s attorney warned Discover’s attorney that a motion for default judgment would be

filed if an answer was not filed within fourteen days. When Discover failed to file an answer

within the fourteen days, Morgan filed a motion for default judgment. Discover’s attorney

failed to show up for the hearing and a default judgment was awarded to Morgan. Discover

filed a Motion to Set Aside Default Judgment “pursuant to Rule 60.02. . . .” This motion was

denied. Following a later hearing on damages, Morgan was awarded compensatory damages

totaling $125,200, which the Trial Court then trebled under the Tennessee Consumer

Protection Act. After obtaining new counsel, Discover filed a motion to alter or amend the

judgment, which was denied. Discover now appeals. We affirm the Trial Court’s Order

denying Discover’s motion to alter or amend the judgment and set aside the default

judgment. We, however, vacate the award of damages and remand for a new hearing on the

amount of damages and also to determine reasonable attorney fees incurred by Morgan on

appeal.

Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit

Court Affirmed in Part and Vacated in Part; Case Remanded

D. MICHAEL SWINEY, J., delivered the opinion of the court, in which HERSCHEL P. FRANKS,

P.J., and CHARLES D. SUSANO, JR., J., joined.
Gary C. Shockley, Nashville, Tennessee, and Ronald S. Range,Jr., Johnson City, Tennessee,

for the Appellant, Discover Bank.

Jennifer L. Chadwell, Oak Ridge, Tennessee, for the Appellee, Joy A. Morgan.

OPINION

Background

This lawsuit began in 2006 when Discover sued Morgan claiming she was

responsible for debts incurred on a Discover credit card in the amount of $16,341.52. The

primary account holder was Morgan’s husband, who was deceased when the lawsuit was

filed. Discover sought a judgment for $16,341.52, plus interest and attorney fees.

Morgan filed an answer and counterclaim. In her answer, Morgan denied being

liable for the amount owed on the credit card. According to Morgan, she never entered into

any contractual arrangement with Discover. Morgan claimed that while she was an

authorized user on the credit card, the card had been issued to Sidney Morgan, her late

husband. Morgan generally denied any liability to Discover. In her counterclaim, Morgan

alleged that her late husband was the primary and only account holder, although she again

acknowledged that she was an authorized user on the card. Morgan claimed that pursuant

to the Card Member Agreement, the primary account holder was liable for any and all

charges made on an account by an authorized user, but not vice versa. Morgan denied ever

entering into any contract with Discover.

According to Morgan, she initially was informed by Discover after her

husband’s death that she would not be responsible for the outstanding balance. She was

instructed to send Discover a copy of her husband’s death certificate, which she did.

Notwithstanding what she was told, Discover began pursuing collection efforts against

Morgan. Morgan asserted that Discover called her on a daily basis and sent collection

notices to her home. Morgan further alleged:

Discover Bank’s attorney was contacted by Mrs.

Morgan’s counsel [who] informed Discover Bank’s counsel that

Mrs. Morgan was not a joint account holder on this account, but

an authorized user only and according to the terms of Discover

Bank’s own agreement, [she was] not liable on this account.

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However, Discover Bank continued to pursue collection of this

account against Mrs. Morgan.

In pursuing payment of this account from Mrs. Morgan,

Discover Bank reported the nonpayment of this account to the

credit reporting agency. This account had been placed on her

credit report and has seriously injured Mrs. Morgan’s credit

rating.

Due to the presence of the collection action on Mrs.

Morgan’s credit report, and injury to her credit score due to

Discover Bank’s actions, Mrs. Morgan has been unable to

refinance her property as she had anticipated at a lower interest

rate. She has continued to pay a higher interest rate on her

mortgage due to her inability to be approved for refinancing at

a lower rate. Chase Home Finance refused to refinance her

property due to her credit score not being at least 660. Prior to

the collection actions reported by Discover Bank to the credit

reporting agency, Mrs. Morgan would have qualified for this

refinancing. The refinancing of her property would have

lowered her interest rate from an 8%, 15 year variable interest

rate to a fixed 30 year, 6.25% interest rate and would have

lowered her monthly mortgage payments by at least $200.00 a

month for at least 15 years.

Due to Discover Bank reporting the collection actions to

the credit reporting agency, other credit companies have

cancelled Mrs. Morgan’s credit with them. Specifically, in July

2005, MBNA closed three accounts Mrs. Morgan had with

them. Mrs. Morgan’s available credit at the time of the closing

of these accounts was $31,500.00. . . . Prior to the reporting of

[Discover’s] account to the credit reporting agencies, Mrs.

Morgan had $123,400.00 available credit. After this account

was reported as delinquent by Discover, her credit accounts had

[been reduced to] . . . $18,000.00.

In addition to the foregoing, Morgan claimed that due to the delinquency being

reported to the credit agencies, the interest rate on one of her credit cards was increased from

11.24% to 29.99%. Morgan brought various claims against Discover, including a claim for

libel, violation of the federal Fair Debt Collections Practices Act, 15 U.S.C. § 1692, et seq.,

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violation of the federal Fair Credit Reporting Act, 15 U.S.C. § 1681, and violation of the

Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101, et seq.

1

Morgan’s answer and counterclaim were filed on January 31, 2007. When no

timely answer to the counterclaim was filed, then attorney for Discover,John M. Richardson,

Jr., (“Richardson”) , requested of and was granted by Morgan’s attorney an extension up to

2

and including April 2, 2007, in which to file an answer to the counterclaim. When no answer

was filed by the new agreed-upon due date, Morgan’s attorney sent a letter to Richardson

informing him that a motion for default judgment would be filed if Discover’s answer was

not received within fourteen days. When that fourteen day period elapsed and still no answer

was forthcoming, Morgan filed a motion for default judgment on May 4, 2007. A hearing

on the motion for default judgment was scheduled for May 22, 2007. Discover’s attorney,

Richardson, received proper notice of the hearing, but on the day of the hearing, Richardson

failed to attend. In addition, Discover still had not filed an answer to the counterclaim and

had filed no response to the motion for default judgment. Not surprisingly, the Trial Court

granted Morgan’s motion for default judgment as to liability and informed Morgan that a

hearing on damages would be scheduled in the near future. The order granting the motion

for default judgment as to liability was entered the same day of the hearing, i.e., May 22,

2007.

On June 8, 2007, Discover filed a motion to set aside the default judgment

pursuant to Tenn. R. Civ. P. 60.02. In this motion, Discover claimed that Richardson made

an “inadvertent error” and documented the wrong hearing date on his calendar. Discover

claimed that “[t]his type of inadvertent error is excusable pursuant to Rule 60.02 of the

Tennessee Rules of Civil Procedure.” No affidavit was filed in support of this motion.

Morgan responded to the motion to set aside default judgment. Morgan argued

the motion to set aside should be denied because: (1) the counterclaim was filed on January

31, 2007; (2) Discover received an extension until April 2, 2007, in which to file its answer

to the counterclaim; (3) when no answer was filed by April 2, 2007, counsel for Morgan sent

a letter to Richardson on April 13, 2007, advising him that if an answer was not received

within the next fourteen days, a motion for default judgment would be filed; (4) when that

Morgan eventually dismissed her claimbrought pursuant to the Fair DebtCollections Practices Act.

1

Attorney John M. Richardson, Jr., works with attorney Steven T. Richardson at the John M.

2

Richardson, Jr., P.C. law firm in Clarksville. The vast majority of the signature lines on pleadings filed by

Discover before retaining new counsel contained one signature line, but had both the names of John M.

Richardson Jr., and Steven T. Richardson typed under that line. The signature is very difficult to read, but

it appears that the pleadings were being signed by John M. Richardson, Jr., although Steven Richardson was

the attorney representing Discover at the hearing on April 29, 2008 discussed later in this Opinion. 

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fourteen day period elapsed and still no answer was received, the motion for default

judgment was filed on May 4, 2007; (5) as of May 22, 2007, which was the day of the

hearing on the motion for default judgment, no response had been filed either to the

counterclaim or to the motion for default judgment; and (6) neither Discover nor its attorney

were present at the May 22 hearing even though proper notice had been sent. Morgan also

argued in her response that calendar errors were not properly considered excusable neglect

under Rule 60.

Over one year after the counterclaim was filed, on February 18, 2008,

Richardson filed an answer to the counterclaim on Discover’s behalf. That same day,

Discover filed an amended motion to set aside the default judgment “pursuant to Rule 60 of

the Tennessee Rules of Civil Procedure. . . .” Discover claimed that Morgan held herself out

as the primary account holder on the Discover card, and that on September 14, 2004,

Discover approved a balance transfer of $14,500 from a Chase credit card. Discover asserted

that thistransfer occurred after Morgan’s husband had passed away. Discover further alleged

that Morgan continued to use the Discover card after her husband’s death, including for the

purchase of airline tickets.

Morgan responded to the amended motion to set aside default judgment,

claiming that her husband had initiated a balance transfer from the Discover card to a Chase

card prior to his death. Morgan claimed that since her husband had just died, she thought it

was appropriate to transfer the money back to the Discover card. Morgan admitted that she

had purchased airline tickets on the Discover card after her husband’s death.

In March of 2008, Morgan filed a motion to dismiss the original complaint

filed against her by Discover. According to Morgan, the “allegations contained in the

Complaint filed by Discover Bank and the allegations contained in the Counter-Complaint

are mutually exclusive of one another.” Because a judgment for Morgan had already been

entered on the counterclaim, Morgan asserted that the original complaint filed by Discover

must be dismissed. The Trial Court agreed and on March 20, 2008, it dismissed the original

complaint filed by Discover. Discover filed a motion to set aside the dismissal of its

complaint, but that motion was denied.

On April 4, 2008, the Trial Court entered an order denying Discover’s motion

to set aside the default judgment. The Trial Court noted that the basis upon which Discover

was attempting to set aside the default judgment was “excusable neglect.” The Trial Court

then stated that failing to timely file an answer and failing to appear at the default hearing did

not constitute “excusable neglect.”

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A hearing on Morgan’s request for damages was conducted on April 29, 2008.

Following that hearing, the Trial Court entered an order awarding Morgan actual damages

of $125,200, which it then trebled pursuant to the Tennessee Consumer Protection Act,

resulting in a total damage award of $375,600. The Trial Court also awarded Morgan

attorney fees of $4,460.00.

On May 7, 2008, Discover retained new counsel. Soon thereafter, Discover

filed a motion to alter or amend the judgment pursuant to Tenn. R. Civ. P. 59.04. As grounds

for this motion, Discover alleged:

1) [the final judgment] is based on the previous interlocutory

Default Judgment entered against Discover, and the Court and

the parties incorrectly evaluated Discover’s motion to set the

Default Judgment aside under Rule 60.02 as if it were a final

judgment, rather than under Rule 54.02 which applies to

interlocutory orders which provides that the order was subject to

revision at any time; 2) even if Rule 60.02 had applied (and

Discover submits that it did not), Discover clearly satisfied Rule

60.02’s more lenientstandards applicable to setting aside default

judgments, and the Court erred in analyzing Discover’s motion

to set aside under the comparatively higher Rule 60.02 standards

applicable to setting aside judgments after a trial; 3) Discover

not only has meritorious defenses to Defendant/CounterPlaintiffs claims, but her claims in fact fail to state a claim upon

which relief can be granted; 4) Discover itself (as distinguished

from its prior counsel) had no knowledge of the motion for

default judgment, entry of the Default Judgment, or counsel’s

efforts to set the Default Judgment aside until May 1, 2008,

almost one year after the Default Judgment was entered and

after the final hearing on Defendant/Counter-Plaintiff’s alleged

damages; 5) Defendant/Counter-Plaintiff has admitted factsthat

almost certainly establish her liability on the account at issue,

whether or not she is an account holder; and 6) the vast majority

of Defendant/Counter-Plaintiff’s damages were based solely on

an alleged reduction in her available credit - that is, reduction in

the amount she could borrow which she would then owe to one

or more creditors - but under the Court’s judgment, Discover

must pay the amount by which her credit was reduced and she

owes no one. (emphasis in the original)

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Not surprisingly, Morgan opposed Discover’s motion. A hearing was held in

January 2009, following which the Trial Court entered an order denying Discover’s motion

to alter or amend the judgment. The Trial Court awarded Morgan an additional $2,000 in

attorney fees for having to defend the motion.

Discover appeals raising the following issues, which we take verbatim from

its brief:

Did the trial court err in denying Discover’s Rule 59.04 Motion

to Alter or Amend Judgment given that:

A. The trial court incorrectly applied Rule 60, rather than

Rule 54, in evaluating Discover’s Motions to Set Aside

the court’s previous Order of “DefaultJudgment,” which

was not a final judgment because it adjudicated fewer

than all the claims of all the parties.

B. In the alternative, even if Rule 60 properly had applied to

Discover’s Motions to Set Aside the trial court’s Order

of “Default Judgment,” Discover satisfied Rule 60’s

excusable neglect standards for setting aside default

judgments.

C. In the alternative, even if Rule 60 properly had applied to

Discover’s Motions to Set Aside the trial court’s Order

of “Default Judgment” and Discover failed to satisfy

Rule 60’s excusable neglect standards, the $380,060 in

damages assessed against Discover was erroneous and

unsupported by competent evidence.

Morgan asks this Court to affirm the judgment of the Trial Court in its entirety.

Morgan also requests an award of attorney fees incurred on appeal.

Discussion

We review a trial court’s ruling on a Tenn. R. Civ. P. 59.04 motion to alter or

amend a judgment using the abuse of discretion standard. See Stovall v. Clarke, 113 S.W.3d

715, 721 (Tenn. 2003); Linkous v. Lane, 276 S.W.3d 917, 924 (Tenn. Ct. App. 2008). As

noted by our Supreme Court:

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An abuse of discretion is found only when a trial court has

“‘applied an incorrect legal standard, or reached a decision

which is against logic or reasoning that caused an injustice to the

party complaining.’” State v. Stevens, 78 S.W.3d 817, 832

(Tenn. 2002) (quoting State v. Shuck, 953 S.W.2d 662, 669

(Tenn. 1997)). The abuse of discretion standard does not permit

an appellate court to merely substitute its judgment for that of

the trial court. See Eldridge v. Eldridge, 42 S.W.3d 82, 85

(Tenn. 2001).

Henry v. Goins, 104 S.W.3d 475, 479 (Tenn. 2003). See also Eldridge v. Eldridge, 42

S.W.3d 82, 85 (Tenn. 2001) (“Under the abuse of discretion standard, a trial court’s ruling

‘will be upheld so long as reasonable minds can disagree as to propriety of the decision

made.’”)(quoting State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000)).

3

Discover’s first issue is its claim that the Trial Court erred when it applied the

standards applicable to Tenn. R. Civ. P. 60 motions, as opposed to the standards applicable

to Rule 54 motions, when evaluating Discover’s original motion to set aside entry of the

default judgment. Discover argues that because the default judgment as to liability was not

a final judgment pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure, that order

was subject to revision at any time and the Rule 60 requirements did not apply.

4

The problem with Discover’s position is that the motion as filed by Discover

states that it was being filed “pursuant to Rule 60.02 of the Tennessee Rules of Civil

Procedure” and that its attorney had committed “inadvertent error [thatshould be considered]

excusable pursuant to Rule 60.02 of the Tennessee Rules of Civil Procedure.” Discover later

amended its motion and the amended version still indicated that it was being filed “pursuant

to Rule 60 of the Tennessee Rules of Civil Procedure. . . .”

We likewise review a trial court’s ruling on a Tenn. R. Civ. P. 60.02 motion for relief from a final 3

judgment using the abuse of discretion standard. Henry v. Goins, 104 S.W.3d 475, 479 (Tenn. 2003). The

abuse of discretion standard also is applied under Rule 54.02. See Harris v. Chern 33 S.W.3d 741, 746

(Tenn. 2000) (“A trial court’s ruling on a motion to revise pursuant to Rule 54.02 will be overturned only

when the trial court has abused its discretion. See Donnelly v. Walter, 959 S.W.2d 166, 168 (Tenn. Ct. App.

1997).”). 

 Tenn. R. Civ. P. 55.02 provides that “[f]or good cause shown the court may set aside a judgment 4

by default in accordance with Rule 60.02.” In Patterson v. SunTrust Bank, No. E2009-01947-COA-R3-CV,

2010 WL 1741377 (Tenn. Ct. App. Apr. 30, 2010), we held that the term “default judgment” contained in

Rule 55.02 refers to a final judgment resolving all issues including liability and damages.

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In pertinent part, Tenn. R. App. P. 36(a) provides that “[n]othing in this rule

shall be construed as requiring relief be granted to a party responsible for an error or who

failed to take whatever action was reasonably available to prevent or nullify the harmful

effect of an error.” Discover explicitly stated several times to the Trial Court that the motion

and amended motion were being filed pursuant Tenn. R. Civ. P. 60.02. In addition, Discover

argued that it was entitled to relief pursuant to that particular Rule. When ruling on the

motion and amended motion, the Trial Court was addressing the specific issues raised by

Discover, i.e., whether the default judgment should be set aside pursuant to Rule 60.02.

We decline to hold that the Trial Court erred by addressing the specific issues

raised by Discover in its motions. If the Trial Court should have analyzed the motion and

amended motion pursuant to Rule 54, then it was Discover who led the Trial Court astray.

In short, if any error was committed, Discover was the party responsible for that error. Tenn.

R. App. P. 36(a). We affirm the judgment of the Trial Court on this issue.

Discover next argues that even if the Trial Court was correct when it relied on

Rule 60 to resolve its motion to set aside the default judgment, it nevertheless erred when it

concluded that Discover was not entitled to relief pursuant to that Rule. In support of this

position, Discover argues, among other things, that its action were not willful and that

Richardson’s calendaring error constituted excusable neglect. Discover had the burden of

showing it was entitled to relief pursuant to Rule 60. See Holly v. Holly, No.

M2007-02130-COA-R3-CV, 2008 WL 2695656, at *3 (Tenn. Ct. App. July 9, 2008), no

appl. perm. appeal filed ([T]he party seeking Rule 60 relief [has] the burden of proving that

such relief was warranted . . . .”). Discover correctly argues that “[m]otions to set aside

default judgments are not viewed with the same strictness that motions to set aside judgments

after a hearing on the merits are viewed. Rather, such motions are construed liberally in

favor of granting the relief requested.” Clark Power Services, Inc. v. Mitchell, No.

E2007-01489-COA-R3-CV, 2008 WL 2200047. at *2 (Tenn. Ct. App. May 27, 2008), no

appl. perm. appeal filed.

The record on appeal contains only an unsupported and unsworn allegation in

a motion that the reason Richardson did not show up for the May 22, 2007, hearing on the

motion for default judgment was because he “documented the wrong hearing date on his

calendar.” However, Richardson has never filed an affidavit to support this assertion. In

addition, while the alleged calendering error may offer some excuse for Richardson not

attending the default hearing, it offers no explanation as to why an answer was not filed until

almost one year late. In short, Discover has offered no affirmative evidence to support its

allegation that the failure to timely file the answer constituted excusable neglect and was not

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willful. See Pryor v. Rivergate Meadows Apartment Associates Limited Partnership, No.

5

M2008–02586-COA-R3-CV, 2009 WL 1181343 (Tenn. Ct. App. May 1, 2009), app. denied

Nov. 23, 2009, (“To meet [the burden under Rule 60], the movant must ‘set forth in a motion

or petition and supporting affidavits facts explaining why the movant was justified in failing

to avoid the mistake, inadvertence, surprise or neglect.’” Id. at *3 (quoting Tennessee State

Bank v. Lay, 609 S.W.2d 525, 527 (Tenn. Ct. App. 1980)) (emphasis added). Accordingly,

we do not conclude that the Trial Court’s refusal to set aside the default judgment pursuant

to Rule 60.02 constituted an abuse of discretion.

Discover’s final issue is its claim that the Trial Court erred in the amount of

damages awarded to Morgan. Morgan testified at the hearing on damages. Morgan stated

that her husband passed away on August 27, 2004. According to Morgan, she was not a joint

account holder on the Discover card. Morgan testified that for a while, she continued to

make payments on the Discover card after her husband passed away. She made a total of

$1,200 in payments which more than covered the cost of the airline ticket she purchased on

the card after her husband’s death. After she stopped making payments, she started receiving

collection letters and collection calls. The delinquency was reported on Morgan’s credit

report beginning in February of 2005. As of the date of the hearing, it was still on her credit

report as a delinquency.

Prior to her husband passing away, Morgan had two credit cards, one with Citi

Bank and another with Chase. On May 5, 2005, Morgan’s available credit on these two cards

was $123,400. As of the date of the hearing, Morgan had $5,500 in available credit. In

February of 2005, her credit accounts started being cancelled and her interest rates began to

increase. The interest on one of her cards increased from 14% to 29.99%. Prior to February

of 2005, Morgan had never applied for a credit card and been denied. After February of

2005, she applied for and was denied a Sears credit card.

After the delinquency appeared on her credit report, Morgan unsuccessfully

attempted to refinance her home. Although she could not obtain refinancing, she was able

to obtain a home equity line of credit. The interest rate on the line of credit was higher than

what she would have received had she been able to refinance. Other than the negative effects

surrounding the Discover card, Morgan had no other negative information on her credit

report.

At the hearing on damages, attorney Steven Richardson informed the Trial Court that he had 5

prepared and filed an affidavit discussing the events surrounding the late filing of the answer. If such an

affidavit was filed, it is not in the record on appeal.

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Following the hearing, the Trial Court awarded Morgan a judgment from the

bench, stating as follows:

The Court has considered the testimony, proof,

statements and arguments of counsel on the issue of damages.

Three causes of action are alleged. Violation of the

Federal Credit Reporting Act, Tennessee Consumer Protection

Act, [and libel.]

What’s been shown to the Court here today is direct costs

of additional credit expenses through higher interest rate and

financing through a Home Equity Line of Credit at a higher rate

and the loss of credit.

The reduction in the available credit as specified, a

significant reduction. $117,900.00; $6800.00 in higher Home

Equity Costs; additional $500.00 in higher interest rates on

cards, total $125,200.00. . . .

The Trial Court then trebled the damages under the Consumer Protection Act, resulting in

a total award of $375,600 in compensatory damages. The Trial Court also awarded

$4,460.00 in attorney fees.

6

“The party seeking damages has the burden of proving them.” BancorpSouth

Bank, Inc. v. Hatchel, 223 S.W.3d 223, 229 (Tenn. Ct. App. 2006)(quoting Overstreet v.

Shoney's, Inc., 4 S.W.3d 694, 703 (Tenn. Ct. App. 1999)). Courts should not award damages

based on mere conjecture or speculation or when “the evidence presented by the plaintiff is

insufficient to enable the trier of fact to make a fair and reasonable assessment of damages.”

Id. at 229-230. While the law does not require exactness in the computation of damages,

proof of damages must be “sufficiently certain to enable the trier of fact, using its discretion,

to make a fair and reasonable assessment of damages.” Id. at 230.

We agree with Discover that it was neither fair nor reasonable for the Trial

Court to award Morgan compensatory damages based on a dollar for dollar amount of the

decrease in her available credit. In other words, even though Morgan’s available credit

decreased by $117,900.00, it was error to award her compensatory damages equal to that

As stated previously, following denial of the Rule 59.04 motion to alter or amend the final 6

judgment, the Trial Court awarded an additional $2,000 in attorney fees.

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amount. While a decrease in her available credit is something for which Morgan is entitled

to reasonable compensation, awarding as damages an amount equal to the decrease in

available credit is an inappropriate way in which to measure such a loss because a one dollar

decrease in available credit is not proof of one dollar of actual damages. Since the decrease

of available credit comprised the vast majority of the judgment awarded to Morgan, we

vacate the entire amount of the judgment, and we remand this case to the Trial Court for a

new hearing on the amount of damages sustained by Morgan.

In summary, we affirm the judgment of the Trial Court which denied

Discover’s Rule 59.04 motion to alter or amend the judgment and set aside the default

judgment. However, the award of damages is vacated, and this case is remanded for a new

hearing to determine the amount of Morgan’s damages. Because we are affirming the default

judgment against Discover asto liability pursuant to the Tennessee Consumer Protection Act,

we think it is appropriate to award Morgan her attorney fees incurred on appeal.

Accordingly, this case is remanded both for a new hearing on a fair and reasonable

assessment of the amount of Morgan’s damages, as well as a determination of the reasonable

attorney fees incurred by Morgan on this appeal.

Conclusion

The judgment of the Circuit Court for Sevier County is affirmed in part and

vacated in part, and this cause is remanded to the Circuit Court for Sevier County for further

proceedings consistent with this Opinion and for collection of the costs below. Exercising

our discretion, costs on appeal are taxed to the Appellant, Discover Bank, and its surety.

________________________________

D. MICHAEL SWINEY, JUDGE

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