# FILED
February 13, 1998 Cecil W. Crowson Appellate Cou rt Clerk 

## IN THE COURT OF APPEALS OF TENNESSEE

AT NASHVILLE

MAURICE KA

RR and ) MAURICE KARR, Trustee, ) ) Plaintiffs/Appell

ees, ) Davidson Chancery

) No. 95-2473-I VS. ) ) Appeal No. PAUL C. GIB SON a/k/a ) 01A01-9605-CH-00220 PAUL CALVIN GIBSON, ) ) Defendant/Appel

lant. )



### APPEAL FROM THE DAVIDSON COUNTY CHANCERY COURT

AT NASHVILLE, TENNESSEE THE HONORABLE IRVIN H. KILCREASE, JR., CHANCE LLOR

For Plaintiffs/Appellees : For Defendant/A ppellant : Robert J. Notestine, III Ramsey B. Leathers, Jr. Nashville, Tennessee Black burn, Slo bby, Freeman & Happel l Nashville, Tennessee



## VACATED AND REMANDED

WILLIAM C. KOCH, JR., JUDGE1 See Tenn. Code Ann. § 21-1-204 (a) - (c) (1994). The order for publication is not in the

appellate record. -2- 

## O P I N I O N

This appeal involves a defi ci ency judgment obtained against a Canadian resident following service by pu blicat ion. The Canadian resident filed a Tenn. R. Civ. P. 60.02 motion in the Chancery Court for

Davidson County seeki

ng to set aside the default judgment obta ined against him on

the grounds that service by publication
was ineffective and th

at he received no not

ice of the lawsuit b

efore the tr

ial c ourt granted the defa ult ju dgment. The trial court denied the motion, and the Canadian resident has appealed. We

have determined tha

t the judgment must beset aside because a personal judgment

cannot be rendered

against a nonresident defen

dant who is served only by publica tion.

I.

In September 1989, P

aul Gibson executed a $109,000 installment note payable to Maurice Karr of Nashville. The note was secured by a c ondominium unit in Nashville. Mr. Gibson later defaulted on the

note, and Mr . Karr, as tru stee on the installment

deed, sold the unit in J

une 1994 for $83,100. In August 1995, Mr. Karr sued Mr. Gibson in the Chance ry Court for David

son County seeking a

judgment for the $37,810.14 deficiency. Mr. Karr’s complaint alleged that he was unaware of Mr. Gibson’s mailing address but that Mr. Gibson w

as presently residin

g in the Canadian province of Ontario. Th e complaint also req uested that Mr. G

ibson be served by publication.
Evidently, the trial court entered an order allowing service by

publication on Mr. Gibson. 1 Notice of the la wsuit was published i n The Nashville Rec

ord on four different occasions during Augu st and September of 1995.In accordance w ith Tenn. Code Ann. § 21-1-205(a) (1994), the clerk and master al so mailed a copy of the notice of publication to Mr.Gibson at his last know n address in Nashvill

e . Mr. Gibsonnever received th

e notice of publicati

on, and the mailed notice of

publication was never returned to t he clerk and master mark ed refused.2 The judgment consisted of th e $37,810.14 defic

iency; $3,017.25 in

prejudgment inter

est; and $8,165.48 in at

torney’s fees. -3- Mr. Karr moved for a

default judgment aga

inst Mr. Gibson

in October 1995 but did not serve a copy of th

e motion on Mr. Gibson because his “ exact mailing address”
was unknown. On Novem ber 20, 1995, the tr

ial court entered a

default judgment against Mr. Gibson for $48, 9 92.87 plus court costs. 2 During a January 9, 1996 telephone co nve rsation, Mr. Karr informed Mr. Gibson’s attorney that he had obtained a deficiency judgment against Mr. Gibson. After talking with Mr. Karr, Mr. Gibson’s attorney immediate ly telephoned Mr. G

ibson to tell him about

the lawsuit and the judgment. Prior to this conversation,

Mr. Gibs on, so his uncontradicted affidavit states,

had no knowledge of Mr . Karr’s laws

uit.

Mr. Gibson filed a Ten

n. R. Civ. P. 60 .02 motion on February 16, 1996, requestingthe trial court to se t asidethe default judgment on the grounds th at the service of process b y pu blication was defe ctive and that he had n

o notice of the lawsuit against him before the trial court enteredthe default judgmen t. The trial court denied Mr. Gibson’s mo tion on March 18, 19 96.

II.

The sole issue before us is whether Mr. Gi bson was entitled to r

elief from the de fault judgment because he had no notice of the lawsuit before the entry of th e default judgment. Mr. Karr asse rts that he obtained se

rvice of process by m

ailing a copy of the order of publication to Mr. Gibson’s la

st known address in N

ashvill e . Mr. Karr’s position lack s legal support.

The law does not favor default judgments because the interests of justice are ordinarily best served by trial s on the merits. See Tennessee Dep’t of Human Servs.
v. Barbee , 689 S.W.2d

863, 866 (Tenn. 1985 ); Coin Automatic Co., Inc. v. Estate of Dixon , 213 Tenn. 311, 321, 375 S.W.2d 858, 862

(1963). Accordingly, Te

nn. R. Civ. P. 55.02, per mits trial courts, for good ca use shown, to set asi

de default judgments in accordance with Tenn. R. Civ. P . 60.02. Rule 60. 02 permits trial courtsto relieve parties from final judgment s for mistake, inadvert

ence, surprise or

excusable

neglect, fraud or other misconduct, where the j udgment is void or has been sati sfied, or for any other reason justifying relief. The courts must construe Tenn. R. Civ. P. 60.02's3 Approximately one month before Mr. Karr filed his complaint, he had closed the sale on Mr. Gibson’s condominium and had received the proceeds of

the transaction.

Mr. Karr knew fu

ll well that someone else

was living at Mr. Gibson’s former add ress. -4- requirements

liberally in the

context of grantin g relief from default ju dgments. See Tennessee Dep’t of Human Services v. Barbee , 689 S.W.2d a t 867 ; Nelson v. Simpson , 826 S.W.2d 483, 485 (Tenn. Ct. App. 1991).

One of the bedrock princ

iples of this nation’s due proc

ess jurisprudence is

the right to notice and an opport

unit y to be heard before an impar tial trier-of-fact. See United States v. James Daniel Good Real P rop. , 510 U.S. 43, 5 3, 114 S. Ct. 492, 500 (1993); Phillips v. State B d. of Regents , 863 S.W.2d 45, 50 (Tenn. 19 93). Thus, due process requires plainti

ffs to give defendants notic e that is reasonably calculated, underall the circumstances , to inform the defenda nts of the pending action. See Mullane v. Central

Hanover Bank & Trust Co. , 339 U.S. 306, 314, 70 S. Ct. 652, 657 (1950); McClellan v. Bo

ard of Regents , 921 S.W.2d 684, 688 (Tenn. 1996). As the United States Supreme C ourt has made clear

, "[t]he means

employed must be such
as one desirous of actua lly informing the

abs entee might reasona bly adopt to accomplish

it." Mullane v. Central

Hanover Bank & Tru

st Co. , 339 U.S. at 315, 70 S. Ct. at 657.

Prior to obtaining his defaul

t judgment, Mr. K

arr did nothing reaso

nably calculated to notify Mr. Gibson of the pending suit see

king a defici ency judgment. Rather than undertaking personal serv ice, Mr . Karr simply pla ced notices in a Nashville legal newspaper and mailed a notice to a Nashville addr ess he knew to be outdated. Under the circums tances known to Mr.Karr, placing a notice in a le ga l newspaper

was not reasonably

calculated to informa Canadian residen t of a pending Tennessee lawsuit.

Mr. Karr’s formalistic compliancewith Tenn. Code Ann. § 21-1-205(a) (1994) is equally inadequat e. Mr. Ka rr knew that Mr. Gi bson was no longer livin g at 137 Harpeth Trace Drive,

Nashville when he directed the clerk and master to mail a

copy of the published notice to that addr ess . 3 Going through these e mpty motions not reasonably

calculated to ac tual ly bring a lawsuit to a nonresident defendant’s attention cannot sati sfy the requiremen ts of due process.4 Mr. Gibson argues her e th at th e condominium was worth $142,000 and that it sold at foreclosurefor approximately fort y percent below t hat value. He mai

ntains that the sale

price is inadequate

en ough to raise the possibility of fraud. Mr. Gibson also disputes the amount of attorney’s fees claimed by Mr. Karr. -5- Mr. Karr’s relianc

e on the service by pub

lication statutes is m

isplaced because these statutes do not displace the long-standing principle that a p ersonal judgment cannot be rendered agains

t a nonresident defe

ndant who has b een served only by publication. See Turnblazer v. Smith , 214 Tenn. 277, 281 -82, 379 S.W.2d 77 2, 774 (1964). Since Mr. Karr’s complaint sought a personal judgment against Mr. Gibson, Mr. Gi bson was e ntitled to notice eithe r by personal servic

e or by service upon
someonedesignated by law as his representat ive for service. See Continental Ins. Co.
v. Masters , App. No. 01A01-9206-CH-0025 4, 1993 WL 4856,at *2 (Tenn. Ct.App. Jan. 13, 1993) (No Tenn. R. App. P. 11 filed).

Tenn. Code Ann. § 21-1-205 (a) permits a trial court to consider

independent p roof that a nonresident defendant had actual notice of the suit. Mr. Karr’s brief suggests that “[t]he poss ibi lity exists that additio nal evidence was a

vailable to the Chancellor

at the hearing on Gi

bso n’s Motion which he relied upon in making his decision to deny Gibson’s motion .” This evidence, if it exists, is not before us. Both parties share the responsibi lity to make sure that the record on appeal contains a “fair, accurate and complete account of what transpired with respect to those issues that are the bases of appeal.” See Tenn. R. A p p. P. 24(a)-(c ). Thus, if this e

vidence exists, Mr. Karr should have ta

ken steps to make sure

it was included in the

appellate record

. We rest our decision strictly on the appellate reco r d, and nothing before this court indicates that Mr.Gibson knew about this lawsuit prior to Jan

uary 9, 1996.

Mr. Karr also argues

that Mr. Gibson

has not d enied owing a defic iency and that M r. Gibson has not asserted any meritor ious defense to the de

ficiency suit. 4 Ordinarily, courts will not set a sid e default judgments a bsent a showing that th

e defendant has a colorably merit orious defense. See Patterson v. Rockwell Int’l , 665 S.W.2d 96, 100 (Tenn. 1984); In re Estate of Mayes , 843 S.W.2d 418, 425-26 (Tenn. Ct. App. 1992). However, the general rule requiring the proffer of a mer itorious defense does not apply when a d efendant is seeking to set aside a default judgment that is legally void. See Patterson v. Rock well I nt’l , 665 S .W.2d at 101; Terminix Int’lCo., L.P. v. Tapley , App. No. 02A01-9701-CH-0002 8, 1997 WL 437222, a t *3 (Tenn. Ct. App. Aug. 4, 1997) (No Tenn. R. App. P. 11 filed). A personal judgment-6-

against a defendant who was never before the court by proper service or volun tary appearance is void. See Overby v. O verby , 224 Tenn. 523, 525 -26, 457 S.W.2d 851, 852 (1970); Dickson v. Simpso n , 172 Tenn. 680, 694,

113 S.W.2d 1190, 1195 (1938). Without opining on Mr. Gibson’s complaints about the commercial r

easonableness of the foreclosure sa

le or Mr. Karr’s cl

aimed attorney’s f

ees, we find

that Mr. Gibson
was entitled to relief from the default ju dgment unde

r Tenn. R. Civ. P. 60.0

2(3) because it was void.

III.

We vacate the denial of Mr. Gibson’s motion to set aside the defau

lt judgment
an d rem and the case to the tr ial court for furt

her proceedings cons

istent with this opinion. We also tax the cost s of this appeal to Mau

rice Karr for w

hich execution, if necessary, may issu e.

______________________________ WILLIAM C. KOCH, JR., JUDGE

CONCUR:

__________________________________ HENRY F. TODD, PRESIDING JUDGE MIDDLE SECTION

__________________________________ SAMUEL L. LEWIS, JUDGE