### IN THE COURT OF APP EALS OF TENNESS EE AT NAS HVILLE Marc h 24 , 200 9 S es sio n
AUDREY PRYOR v. RIVERGAT E MEADOW S APARTMENT

A SS OC IA TE S LI M IT ED P A R TN ER SH IP

Direc t Appeal from the Circ uit Court for Davidson County

No. 07C-251 Barbara Haynes, Judge

No. M2008- 02586-COA-R 3-CV - F iled May 1, 2009

When Defe ndant fa iled to respond to Plaintiff’s complaint and discove ry reque sts, the trial court enter ed a de fault judg ment in favor of Plaintiff on the issue of Defenda nt’s liability

. The trial court set a he aring to de termine Plaintiff’s damag es, and both Plaintiff and De fenda nt liti g ated the issue. After the trial cour

t determined the amount of damag es, Defenda nt asked, for t he thi rd t ime, the trial court t o set aside the de fault judg ment and sche dule a tria l on the merits. The trial c ourt denied Def e n d ant’s motion, and Def

endant a ppeals. B eca

use De fenda

nt failed to demonstrate a mer itorious defe nse in its moti on to set aside the de fault judg ment, we a ffirm the r uling of the trial cour

t.

Tenn. R. App . P .3 Appeal as of Right; Judgme nt of th e Circ uit Court Aff irm ed

J. S TEVE N S T A FF O RD , J ., delivere d the opinion of the cour t, in which A L AN E. H I G H ERS , P.J ., W.S ., and D AVI D R. F ARMER , J ., joined.

Daniel W. Olivas, Nashville, TN for the Appellant, Riverg ate Meadow s Apar tments As s o ci at es L imi te d Pa

rt ne rs hip Stanley A. Davis, Na shville, TN for the A ppellee, Audrey

Pry or

OP IN ION

Ba ckg round Plaintiff/Appellee Audr ey Pry or initiated this action in Davidson C o u n t y Circuit Court on Aug ust 31, 2007. Ms. P ry or alleg ed that she was injured af ter slipping in water lef

t on the kitchen floor of he r apa

rtment. Def

endant/Appe llant Riverg ate Me adows Apa rtment Asso ciates L imited Part ne rs hip (“ Riv e rg a te ” ) o wn s and manag e s th e a pa rtme nt c omp le x in w hic h M s. Pr y or re sid e s.-2-

Ms. Pry or’s c omplaint alleg ed that a River g ate e mploy ee, who had ente red Ms. Pryor’s a partment to repa ir a re frig erator, failed to c lean up a pool of wate r on the kitche n floor. Riverg ate is a f

oreig n entity

with its hom e offi ce s in Pennsy lvania. Corporation Service Company (“CSC”) is Riverg ate’ s reg istered ag ent for se rvice of proc ess. On September 12, 2007, Kevin Willi ams, the proc ess serve r, deliver ed the Return on Summons indicating that CSC had bee n proper ly serve d with Ms. Pry or’s complaint and discove ry reque sts. Ri verg ate did not re spond, and on Dec ember

20, 2007, Ms. Pry or filed a motion asking the trial court to ente r a de fault judg ment
a g a ins t Riv e rg a te . In th e same mot ion , M s. Pr y or a sk e d th e tr ia l c ourt

to s e t a he ari ngon

dama g e s. This motion i ncluded a cer tificate of service indicating that a copy of the motion had bee n forwa rded to C SC. A g a in, Riv e rg ate did no t r e sp on d, and

on F e br ua ry 21 , 2 00 8, the trial court

g ra nte d M s. Pr y or ’s mot ion

fo r d e fa ult jud g me nt a

nd se t a he ari ngon

dama g e s.
On Marc h 19, 2008, Riverg ate made its fir st a ppear ance and filed a

motion for relief

from the def ault judgme nt. Attached to the motion we re the aff idavits of Paul Matthews, a r epre sentative of CSC, and Helen Ang elo, Riverg ate’ s vice pre sident. Mr. Matt h ew s stated that CSC had not
rec eived a

ny of Ms. Pryor’s filings, including the complaint, until March 3, 2008, whe n it rece ived the Orde r Setting H ear ing on D amag es. Ms. Ang elo also asse rted that Riverg ate ha d not rec eived notice of Ms. Pryor’s a ction. Riverg ate soug ht relief f rom t h e d efa

ult judgment under

Tenne ssee Rule of Civil P roce dure 60.02. River g ate a rgued that relief was warra nted due to mistake, surpr ise, or excusable ne g lect, indicatingthat it was rely ing on subpart (1) of

Rule 60.02. Riverg ate a sserted that it did n ot wil lf

ull y ig no re the laws uit

and that it ha d “ nume ro us me ri tor iou s d e fe ns e s” to M s. Pry or’s a ction. After

a hea ri n g o n t h e i s s u e, the tria l court ente red a n order denying River g ate’ s motion to s et aside the defa ult judgment on Apr il 14, 2008.

Wit h the issue o f Riverg ate’ s liabilit y settled, the trial cour

t held a hea

ring on Ms. Pry or’s dama g e s. On Au g us t 13, 200 8, the tr ia l court e nte re d anor de r a wa rd ingMs. Pr

y or $1 02 ,3 20 .5 5 in compensatory

damag es. Riverg ate, on Septembe r 11, 2008, filed a m o t i o n fo r a new trial on the
me ri ts a s to a ll iss ue s, a

mot ion to a lte r o r a

me nd , a nd a mot ion fo r r e lie f f

ro m th e de fa

ult jud g me nt. Riv e rg a te a tta c he d to the mot ion the a ff ida vit of Da rr e l Danf or th, the Se rv ic e Di re c tor

a t Riv e rg a te Me a do ws Ap artme nts . M r. Da nf or th w a s th e e mpl oy e e who had pe rf or me d ma int e na

nc e in M s. Pry or’s kitche n. In his affidavit, he stated that he had not le ft water on the kitchen floor–the a lleg ed
cause of Ms. Pry or’s a ccide nt. Riverg ate’ s argument ag ain indicated ( althoug h not expl icitly) that it sought re lief fr om the defa ult judgment under

Tenn. R. Civ. P. 60.02(1).

After another hear ing, the trial court e ntere d an orde r on Oc tober 10, 2 0 0 8, denying Ri v e r g a te ’ s mo ti o no na ll g r o un d s

. Ri v e r g a te f il e d a ti me ly n o ti c e o f a p p e a l a n d r a is e s o n e is s u e, as stated in its brief, f

or re view:

I . Whether the trial c ourt abused its di s cr et ion and applied the inc orre ct leg al standard t o R i v erg ate’ s motion t o set aside de fault whe n it failed to find that: 1) Riverg ate or

CSC was willful in the def ault; 2) Riverg ate’ s defe nses lacke d merit; 3) Ms. Pry or would suffe r pre judice if the de fault we re se t aside.-3- L aw a nd An a ly sis

The stat e d is s u e a s k s th is Co urt to r e v ie w th e tr ia l c o urt’ s o r d e r d e n yin g it s mo ti o n to set
a sid e the de fa

ult jud g me nt u

nd e r T e nn . R. Civ

. P. 6 0. 02 . Ri ve rg a te ’s mot ion wa s f ile d w ith in t

hir ty day s o f the entry

of judg ment, and it should be dee med a motion to alter or a mend the judg ment under Te nn. R. Civ. P . 59.04. Henson v. Diehl Mach i n es , I nc. , 6 74 S.W. 2d

30 7, 31 0 ( Te nn . Ct

. Ap p

. 1 9 8 4 ) ( ci t i n g Cam

pbell v. Archer , 555 S.W .2d 110, 112 (Tenn. 1977) ). L ike Rule 60.02(1), Rul e 59 c an p ro vid e re lie f f ro m a jud g me nt d

ue to m istake, in adv erte nc e , s ur pr ise , o r e xcu sa

ble neg lect. Henson , 674 S.W .2d at 310. Whether brought under Rule 59 or Rule 60, the standar d for revie wing the m otion is the s ame because of Rule 55.02. Estate of V anleer v. Harakas , No. M2001- 00687-COA-R3-CV, 2002 WL32332191, at *4 n.5 (Te nn. Ct. App. Dec. 5, 2002) Tenn. R. Civ. P. 55.02 provides that a defa ult judg ment may

be set a side as provide d in Tenn. R. C iv. P. 6 0. 02 . Ru le 60 .0 2 p ro vid e s r e lie f f ro m f ina l ju dg me nts a s f

oll ow s:
On moti o n an d u pon such terms a s are just, the court may relieve a par

ty or the party ' s leg al re prese ntative from a final judgm en t , o rd er or proce edingfor the following rea sons: (1) mistake, i nadver tence , surprise or excusable negle ct; (2) f raud (whe ther he retofor e denominate d intrinsic or extrinsi c), misre prese ntation, or other misconduct of an a dverse party ; (3) the judgme nt is void; ( 4) the judg ment has bee n satisfied, release d or di schar g ed, or a prior judgme nt upon which it is based ha s been
re ve rs e d o r ot herwise va c a te d, or it i s n o lo ng e r e qu ita

ble tha t a jud g me nt s ho uld have pr ospective a

pplication; or (5) a

ny other re ason justifying r eli ef fr o m the operation of t he judgment. The motion shall be made within a rea sonable time, and for r easons ( 1) and (2) not more than one y ear afte r t he judgment, order or procee ding
was e ntere d or take n
Tenn. R. Civ. P. 60.02. R iverg ate’ s motion to s et aside the defa ult judgment mentions Rule 60.02 but do e s n ot s pe c if

y the su bp art of the Rul e on

wh ic h it re lies. Ri ver g a te ’s br ie f, a lon g wi th counsel’s state ments at oral a rgument, make it c lear

that Riverg ate se eks re lief under Rule 60.02(1).

The de cision to set aside a de fault judg ment under Rule 60.02(1) is within the discre tion of the trial cour

t, and we r eview the trial court’ s decision under an abuse of discre tion standard. He nry , 104 S.W .3d at 479. Under this standard, an a

ppellate c ourt is not permitted to substi tute its judgment for that of t he trial court. Eldridge v. Eldridge , 42 S.W .3d 82, 85 (Tenn. 2001) . We will set aside the tr ia l c o urt’ s r

u li n g o n ly w h e n th e tr ia l c o urt “ a p p li e d an in c o r

r e c t le g a l s ta

n d ar d , or re ache d a dec is io nw h ic his a g a in s t l o g ic o r r e a s o n in g th a t c a

u s e d anin ju s ti c e to th e p arty

c o mp la in ing .” He nry , 1 0 4 S

. W

. 3 d

at4 7 9 (q u o t i n g Sta te

v . St e v e ns , 78 S. W.3 d 8 17 , 8 32 (T e nn . 2 00 2) ). De sp ite this strict standa

rd of re view, Rule 60.02 motions should be viewed libera lly when the mova

nt seeks relief fro m a d ef

au lt judgment. Tenn. Dep’t of Hum an Servs. v. Barbee , 689 S.W .2d 863, 866 (Tenn. 1985). There fore , “the court should g rant the a pplication whene ver the re is re asonable doubt as t o whether the default judgme nt should be set aside.” Tenn. State Bank v. Lay , 609 S.W .2d 525,-4-

5 2 7 (T en n

. C t

. Ap p

. 1 9 8 0 ) ( ci t i n g Keck v . Nationw ide Sys., Inc. , 499 S.W. 2d 26 6, 26 7 ( Te nn . Ct

. App. 1973) The party seeking relief under Rule 60.02( 1) has the bur den to “of fer proof of the basis on which re lief is soug ht.” He nry v . G oin s , 104 S.W .3d 475, 482 (Tenn. 2003) . To meet this burden, the movant must “set forth in a motion or pe tition and supporting affidavits facts explaining why the movant was justified in fa i l i n g t o avoid the mistake, inadve rtenc e, surpr ise or neg lect.” Lay , 609 S.W .2d at 527. Three fac tors must be considered whe n deter mining if a

defa ult judgment should be
va c a te d und e r R

ule 60 .0 2( 1) : “ (1 ) wh e the r the de fa ult wa s wi llf

ul; (2 ) wh e the r t

he de fe nd ant h a s a meritorious defe nse; and (3) whether the non-de faulti n g p ar t y would be pre

judiced if re lief we re g rante d.” He nry

v . G oin s , 1 0 4 S

. W

. 3 d 4 7 5 , 4 8 1 (T en n

. 2 0 0 3 ) ( ci t i n g Te nn. De p’ t of Human Se rv

s. v. Barbee , 6 89 S.W. 2d

86 3, 86 6 ( Te nn . 1 98 5) . A g a in, the tr ia l c ourt “ is i n th e be st p os iti on

to a sse ss the various fac tors that should be considered in deter mining whe ther a

defa ult judgment should be
vacated.” Barbee , 689 S.W .2d at 867.

Th e se fa c tor s–

wi llf uln e ss, me ri tor iou s d e fe ns e , a nd pr e jud ic e –h ave no t r epl aced th e Rul e 60.02(1) r easons of mistake, inadve rtenc e, surpr ise or excusable ne g lect. Bow e rs v . Gutte rg uard of Tenn., Inc. , No. M2002-02877-COA- R3-CV, 2003 WL 229944302, at *7 (Te nn. Ct. App. D ec. 17, 2003). Specific ally , Tenne ssee c ourts have wrestled with the a ppare n t i ncompatibility

of “excusable ne g lect” a

nd “willfulness.” A rec ent Tenne ssee decision explained the re lationship as follows: “[t] his approac h has bee n to find that neg lige nce, a form of ne g lect, may

be excusable a

nd to employ wilfulness as a critical factor in dist inguishingneg lect that is excusable fr om that which is not.” World Relief Corp. of Nat’l Ass’n o f E va n g eli cals v. Messay , No. M2005-01533-COA- R3-CV, 2007 WL 2198199, at *7 n. 9 (Te nn. Ct. App. J uly 26, 2007).
As a g ener al rule, Te nnessee courts have found that “f ailure of notice of a

critica l step in a lawsuit can constitute justification for ex cusable neg lect” under Tenn. R. Civ. P . 60.02(1). Est ate of V anleer v. Harakas , No. M200100687COAR3CV, 2002 WL 32332191, at *6 (Te nn. Ct. App. Dec . 5, 2002). In Lay , the Court found excusable ne g lect whe n it “could be r easona bly conclude d that defe ndant was not infor med of the c hance ry

court proc eedinguntil afte r j udg ment was re ndere d and that she t here afte r acted di lige ntly in attempting to prote ct her rig hts.” L ay , 609 S.W .2d at 527. In Keck , the moving pa

rt y p re s en ted an a ffidavit statingthat “the summons and complaint we re ma ile d to the natio na l of

fi c e and due to mi sta

ke or ina dv e rt e nc e , th e do c ume nts we re a pp are ntl y lost.” Keck , 499 S.W .2d at 267. Findingan abuse of discre tion, the Court held that this m istake wa s excusable and r emande d for a trial on the merits. Id . at 268.

In the pre sent ca se, Riverg ate c oncede s that Ms. Pry o r’ s p l ea d i ng s include ce rtificate s of service indicating that CSC , Riverg ate’ s ag ent, had be en ser ved. Riverg ate doe s not challeng e the
a de qu a c y of se rv ic e , but ins te a d, c on te nd s th a t it wa s n ot a

wa re of Ms. Pr y or ’s a c tio ns . Ri ve rg a te argues that the ne g lige nce, whether on t h e p ar t of CSC or Ri verg ate, wa s theref ore e x cusable

. Finally , Ri v e r g a te a s s e rts th a t i ts n e g le c t i s e xc u s a b le b e c a u s e it to o k a c ti o ns h o rtl y

a f te r le ar ning that Ms. Pry or had obta i n ed a j u dg ment on the issue of Riverg ate’ s liabilit y . As the trial cour t appar ently

found, Riverg ate’ s assertions on this point ar e somewhat dubious. H oweve r, we do notT h is re q u ire m e n t d o e s n o t ap p ly wh e re the ju d g m e n t i s v o id

. Pat t er s on , 665 S. W

. 2d at 100

. Ri ver gat e, 1 h o w e v e r, h a s n o t alle g e d tha t t h is ju d g m e n t i s v o id

. -5- de c ide wh e the r t

his c on du c t amou

nte d to “ e xcu sa

ble ne g le c t” be c a

us e Riv e rg a te f

ailed to demonstrate a

meritorious defe nse.
The Te nnessee Supreme Court has f ound that excusable neg lect is insuff icient to set aside
a de fa ult jud g me nt; the mov ant mus t a lso de mon str a te a me ri tor iou s de fe ns e to the pla int if f’ s c la im. 1 Patte rson v. Rockwell In t’l , 665 S.W .2d 96, 100 (Tenn. 1984) . A conc lusory statement, such a s “[the movant] believes itself to have a good and va lid defense ,” is insufficient. I d. at 101. Se e als o , Turner v. Turn er , 739 S.W .2d 779, 781 (Tenn. Ct. App. 1986) ( finding that an af fidavit, which stated “[m] y wife has taken a considera ble amount of our proper

ty which I fee l the court would have awa rded to me if I

could have been pr esent at the hear ing,” did not assert a me ritorious defe nse). Riverg ate c oncede s that it did not e x plicitly asser t a meritorious defe nse in its initial mot ion fo r r e lie f f ro m th e de fa

ult jud g me nt. F ur

the rm or e , Ri ve rg a te did

no t a sse rt a de fe ns e duri ngthe six month discovery

period, and it failed to a ssert a de fense in its oral motion for relief a fter the hear ing on damag es. Riverg ate f

irst articulate d its de fense , in Mr. Danf orth’s af fidavit, only

afte r the trial court e ntere d its final order on August 13, 2008. The tria l court did not make a specific finding on Riverg ate’ s new c laim. I n its statements at th e h ea ri ng , howeve r, the c ourt appe are d reluc tant or unwilling to consider

new e vidence supporting a motion which i t had denie d on two previous
occa sions. The trial cour t stated, at the e nd of the he aring , “[h] avinghear d this three times, I ’m g oing to de ny

the motion.”
On appe al, Riverg ate c ontends that Rule 60.02 does not prohibit a par ty from using ne w evidenc e as the basis for an additional motion to s et aside a defa ult judgment. Riverg ate’ s g ener al
asser tion is correc t, but a movant, under e ither Rule 59 or Rule 60.02, must show that “the ne w evidenc e wa s not known to the moving party prior to or duringtrial and that it could not have been known to him through e x erc ise of re asonable diligenc e.” Se ay v . Ci ty of Knox v ill e , 654 S.W .2d 397, 39 9 (T e nn . Ct . App . 1 98 3) ; se e als o , S.M.R. Ent ers., I nc. v. S. Haircutt

er’s Inc. , 662 S.W .2d 944, 950 (Tenn. Ct. App. 1983). Riverg ate did not pre sent any evidenc e showingthat it ex erc ised such dil i g e n c e , an d

t h e t r i a l c o urta c t e d

w i th i ni t s d i s c r e t i o ni nd i s r e g ar d i n g M r

. D an f o rth ’ s a f f i d av i t. Acc ording ly , Riverg ate’ s attempt to demonstrate a meritorious defe n s e re s t s on the conc lusory
asser tions set forth in its initial motion to s et aside the judgme nt. As rec og nized in Patterson , such conclusory

statements ar e insuffic ient.

Be cause Riverg ate failed to de monstrate a timely meritorious defe nse, we find that the trial court did not abuse its discre tion when it denied the motion for r elief f rom defa ult judgment. The jud g me nt o f t

he tr ia l c ourt

is the re fo re a ff

ir me d. Cos ts a

re a sse sse d to the Ap pe lla nt.-6- ___________________________________ J. S T E V E N S T A F F O R D , J.