### IN THE COURT OF APPEALS OF TENNESSEE AT NASHVILLE January 10, 2002 Se ssion
ESTATE OF ANT HONY D. VA NLEER V. SA RA HARAKAS , ET AL.

Appeal from the Chancery Court for Hickman County No. 991524 Donald P. Harris, Judge

No. M2001-00687-COA-R3-CV - Filed December 5, 2002

A default judgment

was entered against Sara a nd Andre Ha

rakas, t he Appellants her

ein, in a d ispute over defects in the construction of a residenc e. At the time the default judgment was entered, Mr. andMrs. Harakas had not answered the complaint. Mr. a nd Mrs. Harakas filed a pro se motion to set aside the default judgment, arguing that they did not rece

ive the notice of the motion for default judgment, which thetrial court denied after a hearing that included testimony

from Mrs. Haraka s. Mr. and Mrs. H arakasthen ret ained an attorne y who filed a

motion toalter or amend therefusa l to set aside the default judgment and a second motion to set aside the judgment taken by def ault. The trial court de

nied thes e motions. Becau se there was rea sonable d

oubt as to w

hether t he defa ult judgment should have been set aside, we reve rse the trial court’s refusal to set aside. Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court Reversed and Remanded

P AT RICIA J. C OTT RELL , J., delive red the opin ion of the court, in which W IL LI AM B. C AIN , J., and I RVIN H. K ILCREASE , S P

. J., joined.
Karla C. Hewitt, N ashville, Tenness ee, for the appe llants, Sa ra Hara kas and A ndre Ha rakas.
Ronald Kilgore, Kirk Vandivort, Charlotte, Tennessee, f or the appellee, The Estate of Anthony Douglas Vanleer.
OPINION
This case involves a dispute over defects in the construction of a residenceowned b y Mr. Anthony Vanlee, now deceased, and the tria l court’s grant

of a default judgment for

his Estate. Mr. Vanleer entered into a contract with Sara and Andre Harakas in March of 1996 for the construction of a home. The house was completed in April of 1996, and Mr. V anle er took possession of the residencein Ma y. T ra gi ca ll y, on October 27, 1996, M

r. Vanleer was mu

rdered . His mothe

r, Mrs. Martha A. Vanleer, was appointed administratrix of the Estate and assumed the role of owner of the property.1 While t his let ter does not

appear in t

he record, it is r eferen ced in the af fidavit of Mrs. Harakas. In addition, at the heari ng on the moti on to a lt er or amend, both c ounse l an d the tri al c ourt acknow ledge d the “re quest for
con tinuanc e.”

2 According to M rs. Ha rakas ’s affidavit, she called the Clerk and Master’s offi ce that morning to noti fy the j udge that the Harakas es wou ld be r unni ng l ate for the heari ng. Mr. and M rs. Haraka s arriv ed at the courthouse at app roxim ately 9:15 a.m. an d filed a their mo tion to se t aside d efault jud gme nt. Th ey rem ained at the co urtho use un til around 9:45 a.m. before dis covering that the hearing f

or damages had al ready been h eld. They left aft er being notif ied that the hearing h ad alr eady c on clude d and l earni ng t hat thei r moti on to s et a side defa ult woul d be hear d on Jun e 20, 2000. The he ari ng was lat er move d to Ju ly 18, 2000.

3 Among othe r as sert

ions , the Harak ases deni ed th at pr oblems wit h th e hous e were rel ated t o construc ti on defects, stated that the house had remaine d unoccupied, unheat ed, and uncool ed for three years bef ore the s uit , and that M r. Va nleer a nd his fian ceé h ad b een p leased with the ho use an d had no p rob lems w ith it.
-2- According to Mrs. Vanleer, in late 1996 problemsbegan to arise with workmanship and the failure of Mr. Harakas to fulfill certain terms of the co ntract. Although discussions took place betweenthe parties and, a ppare ntly , some wor

k was per formed, the disput

e continued until Mr s. Vanleer filed suit on behalf of the Estate on December 22, 1999, all eg in g b re ac h o f w ar ra nt y, equitabl e estoppel, and breach of contract. Due to the nature of this appeal, the procedura l history of the case at the trial court level is of paramount importanc e.
On December 24, 1999, Mr. and Mrs. Har akas we re serv ed with the

complain t. On January 20, 2000, Mr. and Mrs. Harakas, appearing pro se , wrote a letter to opposing counsel and sent a copy of the letter to

the trial court asking for

thirty (30) add itional da ys t o answer the compl aint. 1 Mr. and Mrs. Harakas claimed that health problems prevented them from filing an answer.
On April 7, 2000, the Estate filed a motion for default judgment. The motion contained a certifi cate of service, signed by c ounsel for the Estate and certify

ing that it was mailed to Mr. and Mrs. Harakas that day

at the same address. The trial court gra nted the motion for default judgment on May 9, 2000, at which time the Harakases still had not filed an answer. Mr. and Mrs. Harakas did not appear at the hearing on the motion for def ault judgment. The trial court mailed a copy of the default judgment

to Mr. and Mrs. Harakas, notify ing them of the judgment and the date on which the hearing

for dama ges wouldbe held in

the trial court, June

5, 2000. Mr . and Mrs. Haraka s came to the cour

thouse that day but missed the hear ing on damages because

they were

late for the docket call. The same day , Mr. and M

rs. Hara kas filed a motion to s et aside

default judgmen t. 2

On July, 18, 2000, M rs. V anleer, her counsel, and Mr. and Mrs. Ha rakas appeared at the hearing on the motion to set as ide the default judgment. Mrs. Harakas testified that she a nd her husbanddid not receive notice of the motion for default judgment. The judge appointed

to hear the argume nts on the motion was different from the judge who had he ard all previous issues regarding the Estate’s complaint. Mr. and Mrs. Harakas filed an answe r 3 and cross-complaint

on th e s am e d ay, again appear ing pro se . The trial court denied themotion to set aside default judgment and entered an ord er on J uly 20, 2 000, t o that effect , stat ing:4 Tenn. R. Civ. P. 55.01 provided at the ti me rel evant here in t hat the noti ce of

the moti on for

default judgment be ser ved on t

he par ty agai nst

whom defa ult

judgme nt i s sou ghtthi rty (30) da ys prior to the hear ing on the motion. Tenn. R. Civ. P . 6.05 pro vides that three (3) d ays shall b e add ed w hen se rvice is m ade upo n an o ppo sing pa rty by m a il in certain spec ified circ umsta nces. -3- . . . after hearing sworn tes t imony of the Defendant, Sara Harakas, a rgument of Counsel for the Plaintiff, and the entire record, and the Court having con sidered

said Motion and the Court being fully advised is of the opinion that the Defendants have not provid

ed suffi cient g

rounds to set aside the Defa ult Judgment pursuant t

o Rule 55 of the Te

nnessee Rules of Civ

il Proced ure, and the Court f

inds that th

e Motion to Set Aside the Default Judgment is not well taken and should not be granted.
On August 14, 2000, the Order for Damages was entered in accordance with the events that transpiredat

the hearing on that issue, granting a judgment for theEstate in the amount of Twelve Thousand Three Hundred Twenty Dollars ($12,320.00).

Mr. and Mrs. Haraka s the n retained counsel who filed a motion to alter or amend the judgment of the court, for

a new tri al, and to

set aside default judgment pursuant

to Rules 55, 59, and 60, again arguing tha

t the Harakases didnot receive notice of the motion for default judgment. Mr. andMrs. Harakas later amended this motion, asserting that “ although they were served with the initial process , they were

notserved with the motion for default judgment, though the ce rtificate of service appears proper

in allrespects” and th at once t he defa ult judgm ent was e ntered a gainst t hem, they appea

red at the hearing on damag es and filed a motion to set aside the default judgment. Argument

on the amended motion to alter or amend the judgmen t of the c ourt, for

a new tri al, andto set aside default judgment pursuant to Rules 55, 59, and 60 was heard by a third trial judge. Mr. and Mrs. Harakas argued for the first time at this hearing that the hearing on the mo tion for default judgment was held prior to the expiration of the thirty-three (33) days provided for

in Tenn. R. Civ. P. 55.01 and 6.05. 4

The orde r resulting from

that hea ring re flects th at the judge hea

ring the motions:
announced

that the matter

should be submitted to Judge Timothy L . Easter in that he h ear d and denied the original motion to set aside the default judgment filed by the defenda nts. Since that hearing Judge Easter has declined to hear the matter and since the judge who initially ente red the judgment, Judge Jeffrey S. Bivens, is no long er an active trial judge, the court will proceed to dete rmine the case upon the briefs and arguments previously

heard.
The court denied the motion to alter or amend the judgment of the cour t, for a new trial, and to set aside the de fault judgm ent pu rsuan t to R ules 5 5, 59, and 60 stati ng:-4-

Defend ants [Mr. and Mrs. Harakas] argue they were only g

iven 32 days notice [of the motion for def

ault judgment] and, therefore, the hearing was prematu

re. This d efect, if it be one, was not, how ever, ra ised before the court in the defendant’s initial motion to set as ide th e default judgment filed and heard by . . . [the second judge] and, therefore, was waived.
Other than the argument based upon Rule 6.05, T.R.C.P., no new grounds have been presented in this amended motion for relief. On July 18, 2000, . . . [the second judge]
was faced with defe

ndants who had failed to answer the origina l complain

t for almo st seven (7) month s. He det ermined that the d

efenda nts should not be gran ted relief after such a period of time. This court canno t dis agree wi th hi s ruli ng. The amended motion to alter or amend the judgment of the court, for a new trial and to set aside a default judgment should therefore be denied.
Mr. and Mrs. Harakas have appealed the de nial of their motions. The question before us is whether the trial court should have granted the motion to alter or amend the judgment, entered by another judge, deny

ing the motion to set aside the default judgment. I n essen ce , the ques tion is whether the default judgment should have been se t aside.
We have a transcript of the hearing on the motion to alter or amend which consisted only of argument by counsel. The Harakases have provided a Statement of the Evidence, pursuant to Tenn. R. App. P. 24( c), fro m the hea ring he ld July 18 on their pro se motion to se t aside de fault judg ment.
I.
The decision

by a trial cou rt to ente r a defa ult judgm ent o r to re fuse to se

t aside a default judgment is review ed for a

buse of di sc reti on. Patterson v. Rockwell Int’l , 665 S.W.2d 96, 100 (Tenn. 1984); Tennessee State Bank v. Lay , 609 S.W.2d 525, 527 (Tenn. Ct. App. 1980). The burden of estab lishing a

buse of di scretion

is on the party see

king to overturn the trial court’s ruling on appeal. Ballard v. Herzke , 924 S.W.2d 652, 659 (Tenn. 1996).
Under the abuse of discretion standard, a trial court’sruling “ will be upheld so long as reasonable minds can disagree as to the propriety of

the decision made.” A trial court abuses its discretion only when it “a pplies an incorrec t legal sta ndard, or reaches a decision which is a

gainst l ogicor reas oning or that cau ses an inj ustice to the party complaining .” T h e abuse of discretion standard does not permit the appella te court to substitut

e its judgment for t

hat of the trial cou rt. Eldridge v. Eldridge , 42 S.W.3d 82, 85 (Tenn. 2001) (citations omitted).
The party see

king to set aside a default judgment has the burden of demonstrating that it is entitled to relief

based on one of the

applica ble gro unds and th at it

has a meritorious defense to the claims against it. Nelson v. Simpson , 826 S.W.2d 483, 485 (Tenn. Ct. App. 19 91). None theless, if5 The Harak ases’ origina l motio n to set a side state d it was f il ed under

Rule 55 and was fi led wi thi n th irt y (30) days of t he ent ry of the defa ult

judgme nt a nd is , con seque ntl y, properl y cons ider ed a mot ion ma de purs uant to Rul e 59. The lat er mot ion w as a t imel y- fi led Rul e 59 moti on to al ter or ame nd the judg men t declinin g to set a side, co mbin ed w ith
a Rule 6 0 mo tion for r elief by se tting aside the de fault judg men t. See Campbell v. Archer , 555 S.W .2d 110, 112 (Tenn. 1977) foran expl anat ion of the distinction between the two rules. Whether the moti on was made pur suan t t o Rule 59 or (con tinued ...) -5- any reasonable doubt exists as to whether the default judgment should be set aside, the court sho

uld grant relief. Id . 826 S.W.2d a

t 486; Keck

v. Nationwide Sys., Inc ., 499 S.W.2d 266, 267 (Tenn. Ct. App. 1973).
One can findnumerousdecision s where the cour ts make it clear th ey are anxious to see cases de

termined on the mer

its whene ver such is possibl e. It seems to be a universal rule that whenthere is a reasonable doubt as to whether a default judgment should be set aside upon a proper application, the court should exercise its discretion in favor of granting

the application so as to permit a determination of the cause upon its merits.
Keck , 499 S.W.2d at 267. Thus, although the trial court has discretion to deny a motion to setaside a d

efault ju dgment, that discreti on should b e exerci sed in fa vor of se tting as ide the ju dgment i f there is a rea sonable questi on as to t he grou nds fo r such relie f, beca use of the we ll-s ettl ed pref erence f or givi ng ever y person a day

in court to make his or

her defense. Id . 499 S .W.2 d at 26 6-67 ( citi ng Brown v. B rown , 86 Tenn. 277, 7 S. W. 640 (188 7); Roberts v. Stewart , 9 Tenn. ( 1 Yer.) 390 (1830 ); Fidelity- Phoenix Fire Ins. Co. v. Oliver , 25 Tenn. App. 114, 152 S.W.2d 254 (1941)).

In fa ct, in Tennessee State Bank v. Lay , 609 S.W.2d 525 (Tenn. Ct. App. 1980), this court held that the trial court applied the wrong standard in deny ing a m otion to set a side a default judgment where the court had applied a stringe nt standard for altering or setting aside a fina l judgment under Rule 60. Instead, the trial cour tshould have applied the standard favoring the setting aside of defa

ult judgm ents sothat the dispute could be determined on its merits. Id

. 609 S.W.2d at 525. Thus, the trial

court’sdiscreti on must be e xercised by a pply ing the s tandard

applica ble to default judgmen ts and set aside suc h a judg ment if

there is a reasonable question as to the grounds for relief. The relevant criteria a re whether

the failure to respond or

answer was willful, whether the defendant has a meritorious defe nse, and the e xtent of an y pr ejudice to the pla

intiff if r elief is granted. Tennessee Dep’t of Human Servs. v. Barbee , 689 S.W.2d 8 63, 867 (Tenn. 1985 ); Nelson , 826 S.W.2d at 485.
A party ag ainst whom a default judgment has been entered m ay seek relief from that judgment by filing

a motion to alter or amend thejudgment under Tenn. R. Civ. P. 59 or a motion for relief from judgment under Rule 60. 5 Tenn. R. Civ. P. 55.02 allows a trial c ourt togrant relief5 (.. .cont inu ed) Rule 60, the st andard to be a ppli ed is the same be caus e of t he l angua ge of

Rule 55.02.

6 Tenn. R. C iv. P. 5 5 has unde rgon e seve ral revisio ns. The Advisory Commission Com ments state t hat the “former five-day ru le has been expanded to thirty days. Consequently, the def endant must be s erved wit h writ ten notice of the appl icat ion at

least thi rty days bef

ore the def

ault heari ng.” On J uly 1, 2000, the thirty (30) day notice requirement
was chang ed b ack to five days

. Because the defau lt judgm ent in this ca se was s ough t after July 1 , 199 8, bu t prior to July 1, 20 00, the thirty (30 ) day n otice re quire men t app lies.
-6- fr oma default judgment for good ca use shown in accordance with Tenn. R. Civ. P. 60.0 2, whic h provides relief “on such terms as are just”:
from a final judgment, order, or proceeding for the following reasons: (1) mistake, inadvertence, surprise or excusable neglect; (2) fra ud (whether here t ofore d enominatedintrinsic or extrinsic), misrepresentation, or other misconduct of a n adverse pa rt y; (3) the judgment

is void; (4) the judgment has been satisfied released
or disch arge d, or a prior judgment upon which it is based has been reve rsed or otherwis e vacated or i t is no longer equitable that a judgment should have prospective application; or (5) any other reason justifying

relief from theoperation of the judgment.
As suggested above, “Rule 60 is construe d with liber ality to affor d relief from a de

fault judgment.” Barbee , 689 S.W.2d a t 867; Nelson , 826 S.W.2d at 485.

II.
The Harakases’ basic claim is that they never re ceived notice that default judgment was being sought against them or notice of the hearing

. As the pla in langu age of

Tenn. R. Ci v. P. 55.01 makes clear, such notic e is a pre requisite to entry of a def ault judgment. At the time of the filing of the motion for default judgment in the case herein, Tenn. R. Civ. P. 55.01 read: 6 Entry. - When a party a

gainst whom

a judgme nt for af firmativ e relief

is sought has failed to plead or otherwise defend as providedby these rules a nd that fact is made to appear by a ffidavit or other wise, judg

ment by default may be ente

red as follows:
The party entitled

to a judgmen t by default shall apply to the court. All parties agains twhom a default judgment is sought shall be served with a written notice of the applica

tion for judgment a

t least thi rty days befor

e the hearing on the

application, regardless of whether the pa rty has made a

n appearance in the action. . . .
It is well settled that

courts should

grant relief from default judgment where the plaintiff has failedto comply with required proc ed ural safeguards. Nelson , 8 26 S. W. 2d at 48 6. Ac co rd in gl y, appell ate cou rts have set aside default judgments where the plaintiff or plaintiff’s counsel was responsi ble for the lack of notice or inadequate notice. See, e.g. , Johnson v. Wade , No. W1999-7 Some cases i ndicat e that a defaul t judgment

enter ed wit

houtproof

of pro per n otice is v oid. See, e.g. , Mayes , 1995 Tenn. App. LEXIS 10, at *3. In Mayes , there was noth ing i n the r ecord to “r emotely sugges t” the requi sit e noti ce (con tinued ...)
-7- 01651-COA-R3-CV, 200 0 Te nn. App . LEX IS 609 (Ten n. Ct. App. Sept. 6, 20 00) (no Tenn. R. App. P. 11 application filed) (setting aside judgment wher e motion for def

ault judgment, with

certifi cate of service , did not inc lude a da te for the default judgmen t hearing); First Tenn. Bank Nat’l Ass’n v. McClure , N o . 169, 1990 Tenn. App. LEXI S 48 (Tenn. Ct. App. Jan. 31, 1990) (no Tenn. R. App. P. 11 application filed) (holding that where neither de fendant nor his counsel had bee

n served with notice of the moti on for default judg ment or the

hearing thereon , the tria

l court’s grant of defau lt judgment with no pro of of ser

vice in the recor

d was er ror, and the defa ult judgment was set

aside).
If the notice requirement is intended to assure the defenda nts are aware of the impending judgment, the principles and goals underly

ing the notice requireme

nt apply withequal force when the defenda

nt does not

a c tually rece

ive notice even though that failure may not be directly ca

used by the plain tiff. “Notice to

the defe ndant is crucial in obtaining a default judgment.” N ANCY F RAAS M AC LEAN , ET AL ., 4 T ENNESSEE P RACTICE § 55.2 (3d ed. 200 0). In Mayes v. Mayes , No. 03A01- 9404-CV-00121, 1995 Tenn . App. L EXIS 1 0 , at *5 (Te

nn. Ct. App . Jan. 11, 19 95) (no Tenn. R. App. P

. 11 application filed), this court held unequivocally that “no judgment by

default could be entered unless and untilthe requ isit e application to the court for a default judgment ha d been properly ser

ved on the [defendant]. Id . 1995 Tenn. App. LEXIS 10, at *5.
Where a party ha s no actual notice of a critica l date in a court proceeding, the circumstanc es make out a case of mistake, surprise or excusable neglect under Rule 60.02. Campbell v. Archer , 555 S.W.2d 110, 113 (Tenn. 1977). See also Bok v. State of Tenn ., No. 03A01-9812-BC-00426, 1999 Tenn. Ap

p. LE XIS 51 5, at * 3 (Tenn. Ct. App. July 28, 1999) (no Tenn. R. App. P. 11
a pplication filed) (applying that principle to failure of plaintiff’s counsel to receive d efenda nt’ s mo ti on t o di sm is s an d se tt in g as id e di sm is sal ). In Campbell , notice of the trial date had been sent to the office of defendants’ counsel, but the attorne y denied that he w as personally aw are of the trial date. Four day s before the trial date, the defendants changed attorneys, and ne ither the new attorney
nor the defe ndants we

re infor med of the

im pendi ng t rial date. The trial proceeded without defenda nts’ participation, a verdict was rendered, a nd the trial court refused t o g rant a ne w trial. Bec ause the defendants had no actual notice of the trial date , the Supreme Court found the s e circumstance s made out a case of mistake, inadvertence, or e xcusable neglect, rather than one of will ful failure

to appea r. 555 S.W.2 d at 112-1 3. The Cou rt found t he trial c ourt h ad erred i n refusing to set aside the judgment. Thus, gener

ally , failure

of notice of a critical ste

p in a laws uit can c onstitute justification for excusable neglect under Tenn. R. Civ. P. 60, Tate v. County of Monroe , 578 S. W. 642, 644 (Tenn. Ct. App. 1978) (holding that failure to notify defendant of entry

of order overruling motion for new trial was the type of

error set out in Rule 60.02 and justified relief ), and failure of notice has specific ally

been found to constitute excusable neglect justify ing relief from default judgment where combined with other requirements for such relief. Barbee , 689 S.W.2d at 867. 77 (.. .cont inu ed) had been served. Other cases, such as t hose cited herein, st ate that fai lur e of

notice is justification for exc usab le negle ct, implying that the d efault jud gme nt is mere ly void able, n ot vo id. W e thi nk the di sti ncti on may li e in t he proof of

servi ce present ed to the trial c ourt w hen d efault judg men t is request ed. Where, as i n thi s case, the def ault judgment wa s granted on the basi s of couns el’s certi fica te of s ervice , whi ch const itu tes proof of ser vice, the ju dgment was v alidl y ent ered at the time, and the qu estion is whether it should have been set aside based upon equitable principles. Thus, the judgment
was not void. The question of whether a defau lt judgm ent ente red w ithout no tice or c omp liance w ith other proce dural requ ireme nts is prim arily relev ant her ein to t he ques ti on of whether, t o obtain relief from the judgment, the def endant is requ ired to dem onstra te a me ritoriou s defen se. Ge nerally, a party seeking to s et a side a def ault judgme nt mu st show that he or she has a mer itoriou s defen se to the suit, but that re quire men t doe s not ap ply whe re the d efault jud gme nt is void. Patte rson , 665 S.W .2d at 100-01. The H arakases fil ed an answer a nd coun terclaim with sup por ting affidav its demonstrating a merit orious def ense, and th e Esta te has no t argue d they faile d in that re gard . The refore , we will consider the issues as raised by the p arties an d ap ply the m eritorio us de fense re quire men t.

8 In fact, the rule on defaul t judgment was amended in 1996 to requir e noti ce to those part ies wh o had not ye t appeared in the l awsuit. The Advisory Committee c omments in dicate that one reason f

or thi s change w as “t

he li beral Tennessee cas elaw al lowing Rule 60 rel ief. ” -8- In Barbee , the trial

date had been set before defenda nt’s counsel made an appearance in the case, and neither the defendant nor defe ndant’s couns el were served with notice of the trial date, altho ugh plaintiff’s counsel had included that information in a letter to defendant’s c o unsel enclo sing discovery requests. Neither the defendant nor counsel a ppeared at the trial, an d default judgment
was entered. In moving

to setaside the judgment, defendant furnished an a ffidavit from his lawye

r stating the lawyer

was out of the country on

the day of tria

l and that the clerk’s office had not served notice of the trial date. Our Supre me Court determined that the trial court had properly set aside the judgmen t. In reaching

that conclusion, the Court relied heavily on the distinction in the application of Rule 60 to default judgments as opposed to other ty pes of judgmen ts, Id. 689 S.W.2d at 866-67, andcited with approval the approach taken by the fe deral courts in liberally construing Rule 60 where relief is so ug ht fr om de fa ul t j ud gm en ts be ca us e t he in te re st s o f j us ti ce ar e b es t s er ve d b y a trial on the merits. Id. at 866.
A default judgmen t hearing is a cr

itical pr oceeding in a la

wsuit, subj ecting

the defe ndant to judgment agains t him

and disposing of the case as completely as judgment after

trial. See Patterson , 665 S.W.2d at 101 (stating that default judgmen t disposesof a cas e on its merits and is a final order). We must presume that the notice requirement of Tenn. R. Civ. P. 55.01 exists for a purpose: to actually provide notice to a party of a critical step in the lawsuit, with t he pot ential for significant consequ ences. 8 When a defendant is notified of a potentialdefault, he or she may make a Tenn. R. Civ. P. 6.02 motion for an extension of time to plead. M AC LEAN ET AL ., 4 T ENNESSEE P RACTICE § 55.2. Whether or not to grant an extension and allow a late filed answer is, of course, within the discretion of the trial court. State ex rel. Jones v. Looper , 86 S.W.3d 19 4-95 (Te nn. Ct. App. 2000). However, a party

who does not rece

ive notic e that judgment ma y be taken ag ainst him by

default loses the opportuni

ty to avoid tha t result by whateve r availa ble proc edural s teps. Using a similar analysis in Masters by Masters v. Rishton , 863 S.W.2d 7 02 (Tenn . Ct. App. 1992), this court determined that the purpose of Tenn. R. Civ. P. 58, regarding entry of orders, was “to insure th at a par

ty w as awar

e of the e xistence o f a fina

l, appea la bl e judgme

nt in a law suit in9 In the case here in, Mr. and Mrs. Harakas not only argu e th at t hey w ere n ot not

if ied r egardi ng t he hearin g on the moti on, t

hey a lso chal leng e th e dat e on whi ch t he hearin g was hel d. Mr. and Mrs. Harakas ar gue tha t had they been pro perly ser ved wi th t

he mot ion f

or def ault judgme nt t

hat was f il ed on Apri l 7, 2000, the t rial court was sti ll pr ecluded from enter ing def

ault judgment on May 9, 2000, because only t hirt y-two (32) days h ad expired from the date appearing
on the certif

icat e of ser vice, and, accordi ng to Tenn. R. Civ. P. 6.05 (all owing f or the a dditi on of th ree -days to the computa ti on of time w hen a n otice is served by ma il) and T enn. P . Civ. P . 55.0 1 (p rovid ing that the party agai nst whom defau lt judgment is sought must have thirt

y (30) days notice of t

he hearing), t

he heari ng could be hel d by the t rial court
no earli er tha n thirty-three (3 3) d ays after the date o n the ce rtificate of se rvice. In view of our decisi on, it i s not necessary to add ress this argum ent. We also note th at the Harakases clai m they r eceived no not ice; thus , th ey were n ot prejudi ced by the date set f

or the hearing. -9- which he was involved.” Under that rationale, the court hel d, a judgment which was not a ctually served on a party

is not final. We think the same reasoning applies herein.
For all of the above reasons, we conclude that if the H arakases did not actually rec eive notice of the motion for default judgment and the hearing there o n, they demonstrated e xcusable neglect and, if they mee

t the other requirements, are entitled to have the def ault judgment set aside. 9

III.
The order granting defa

ult judgment states that “ Defendants did not appear in Court after being given n otic e of the Motion for Default.” Apparently that statement is based upon the certifi cate of servi ce appe aring on the motion , where in counse l for the E state

certified that a copy of the moti on had be en mailed to the Har

akases.

In their motion to set aside the default judgment, the Harakases alleged they had not received notice of the motion or

the hearing. At the hearing on that motion, Mrs. Harakas testified that neither she nor her husband had received the motion for def ault judgement and that they only learned a

bout the motion when they rec eivedthe order granting judgment and setting the date for the hearing on damages.
The Estate has provided no further evidenc e, by affidav it or t estim ony at the hearin g, regarding service of the notice or its handling after c ounsel signed the certificate. The order deny ing the original motion to set aside does not address the issue of whether the Hara kases actually

received notice. It merely

recites that

“Defendan ts have not provided sufficient grounds to set aside the Default Judgment.” Having accomplished service of the initial complaint and summons pursuant to Tenn. R. Civ. P. 4, a party may

serve subsequent papers under the less stringe

nt requir ements of Tenn. R. Ci v. P. 5. M AC LEAN ET AL ., 3 T ENNESSEE P RACTICE § 5.01. According to Tenn. R. Civ. P. 5.02, service may be accomplished by

delivering a copy

of the document to be served (or leaving it as de scribed in the rule) or by

mailing it to the last known address, or if no address is known, by leaving a copy with the clerk of the court.-10-

Service by p ersonal

deliver y pe rmi ts the op po rt un it y fo r e vi de nc e o f t ha t a ct ua l d el iv er y. Si mi la rl y, using certain ty pes of mail also will produce evidence of delivery , such as a signed return receipt. Thus, the most preferable methods for service ar e personal service and certified or r eturn receipt requested mail, since the party making service will have little or no d oubt that the papers actually rea che d t hei r de st in ati on. In fact, the Tenne ssee Rule s of Civil Procedure prohibit entry

of
a default judgment where the summons and comp laint were served by mail unless the record contains a return receipt

showing personal acceptance by the defe

ndant or designated persons. Tenn. R. Civ. P. 4.04( 10). The

rule re quiring

notice pr ior to entr y of a default judgment does not conta

in the same requirement. However, we note that using a return receipt reque sted or similar procedure requiring signature by

the r ec ipient would elimina te or less en the opp ortunity for a defendant

to claim nonreceipt of the notice.
Even in the absence of such procedures, a s when regular mail is used, service may be proved, and the a pplicabl e rule pr

ovides:
Whenever

any pleading

or other pape r is served under 5.01 and 5.02, proof of the time and manner

of such se

rvice sh all be fil ed befor

e action is taken thereon by

the court or the parties. Proof may be by ce rtificate of a member

of the Bar of the Court
or by affida vit of the person who served the papers, or by any other proof satisfactory to the court.
Tenn. R. Civ. P. 5.03. Thus, the certificate of service was suf ficient proof of notice for the c ourt to en ter def ault judgmen t. However, the later testimony of the defendants that they never received notice was otherwis e un re bu tt ed , t he co ur t m ad e n o f in di ng th is te st im on y w as no t credib le, and th e Estate apparently r

ests solely on the cer

tificate of service.
The certifi cate

of service required by

Tenn. R. Civ. P. 5.0 3 is prima faci a evidence that the document was served in the manner described in the certifi cate and raisesa

rebuttable presumption that it was received by

the person to whom it was sent. Orr v. Orr , No. 01-A01-9012-CH-00464, 1991 Tenn. App. LEXIS 877, at*11 (Tenn. Ct. App. Nov. 6, 1991), later proceeding a t No. 01-A-01- 9109-CH-00322, 1992 Tenn . App. L EXIS 174 (Ten

n. Ct. App. Feb. 19, 1992) (no Tenn. R. App. P. 11 application filed). That presumption can be rebutted. Id . While the details set out in Rule 5.02 “aredesigned to give ever y r easo nable as surance

that a co py o f the per

tinent pa pers in the suit actually reach a dversar y pa rties . . . ,” Advisory Commission Comments to

Rule 5, the

re obviou sly exists the possibility of

proof tha t a document was not received even though a certificate of service appears on it. See Rishton , 863 S.W.2d at 705 (finding that although an order included a certifi cate of service, it was in fact never served).

In Bok v. State of Tenn ., No. 03A01-9812-BC-00426, 1999 Ten n. A pp. LEXIS 515 (Tenn. Ct. App. July 28, 1999) (no Tenn. R. App. P. 11 application filed), this court reversed the judgment of the Claims C ommi ssion refusing to set aside a dismissal which had been g ranted because the10 We note that t he Harakases’ actions after they r ecei ved notice of en try of the default

judgment are consistent with thei r sworn testi mony that they did no t receiv e notic e prio r to the hearing. They fi led a moti on to set aside i n which they als o reque ste d permi ssi on to file an answer. T hey later filed a detailed answe r suppo rted by affidavits and exh ibits. The y have since diligently pursued their rights.

11 W here th e jud gme nt is void , the de fenda nts are n ot req uired to sho w a m eritorio us de fense. See n.6. -11- plaintiff failed to time ly answer the State’s motion to dismiss. The claimant’s attorney filed an affida vit that he did not receive a copy of the motion to dismiss, which was unrefuted in the record. The court found that lack of actual notice constituted excus able neg le ct, that these circumstances created a reasonable question of whe ther default judgement should be set aside, and, relying

upon Tennessee State Bank v. Lay , held such question mandated that the judgment be set aside.

In Tennessee State Bank v. Lay , 609 S.W.2d 525, 527-28 (Tenn. Ct. App. 1980), this court foundthat from

the evide nce it could reasonably

be concluded that the defendant was not informed of the lawsuit against her until after the default judgment was entered and th at she had acted diligen tly to protect her ri ght s thereafter. The evidence showed that process was issued and was returned with a return receipt signed with defenda nt’s name. The plaintiff

provided the aff idavit of
a handwriting expert who stated the signature on the return receipt was the

defendant’s. On the other side, the defe

ndant tes tified by

affida vit that she

did not re ceive the compla int and sum

mo ns and filedthe aff

idavit of a friend to the eff ect the d efenda nt was out o f her hom

e state o n vacati on with the friend on the date of the alleged se rvice. Considering this conflicting evidence, in l ight of the standardfavoring setting aside default judgments where t here is any rea sonable doubt, this court reversed the trial court’s denial of the motion to set aside the def ault judgment.

In Keck v. Nationwide Sys., Inc. , 499 S.W.2d 2 66 (Tenn . Ct. App. 1973), this court held that th e trial court should have set aside a default judgment wher e the complaint and summons were served on t he defendant’s local office and mailed to the na tional office but, through mistake or inadvertence, were apparently lost. In so ruling, this court relied upo n the preference for setting aside a d efault ju dgment w

here the re is any doubt.
We conclude that the evidence cr eated, at the least, a reasonable doubt as to whether the Harakases rece ived actua l notice of the motion for default judgment and the hearing thereon. 10 Co ns eq ue nt ly, in accordance with the principles set out above, we con clude that the default judgment should have been set aside if the Haraka ses demonstrated the existence of a mer itorious de

fense and if the setting aside would not present unacceptable pr ejudice to the Estate.
Alth ough the requirement of a meritorious defense does not appear in the rules, it has been appli ed, almost inva

riably , becau se the request for relief i s based up on equita ble principles. 11 Yearwood, Johnson, Stanton & Crabtree, Inc. v. F

oxland De v. Ventu re , 828 S.W.2d 4 12 (Tenn . Ct. A pp. 1991); Nelson , 826 S.W.2d a t 485. The

Haraka ses filed

an answe

r and cou ntercla im with attachme nts, including aff

idavits , which set forth a meritorious defense. Although the orig inal motion to set aside did not include an assertion that the defendants had a meritorious defense to the lawsuit, the plaintiff’s response to the motion did not raise tha t omission a s a grou

nd for de nial. The-12-

answer and coun terclaimwere filed on the date of the hearing. The or der resulting from that hearing states that the decision was based on the entire record a nd that the court was “fully advised.” On appeal, the Estate a sserts tha t the Har akases f ailed to a llege t he existence of a m

eritorious defen se in their init

ial pro se motion and that at the hearing Mrs. Harakas g ave testimony “as to an y a nd all meritorious defenses.” The statement of the evidence does not include any

refer ence to d efense s to the action. Based on the record befor e us, we find that the Harakases established that they have a meritorious defense.
The final consideration is whether set t ing aside the default judgment, and requir ing the parties to proceed to tria

l, would result in unacceptable prejudice to the Estate. Barbee , 689 S.W.2d at 866. Simply having

to proceed to trial, even a second trial, does not constitute prejudice. Id . 689 S.W.2d at 868; Campbell , 555 S.W.2d at 113. Neither does the mere passage of time. Nelson , 826 S.W.2d at 486. The Estate ha s not asse rted any specific prejudice which would support declining to set aside the default judgment.

In C ampbell , the Supreme Court noted that, although being required to pa rticipate in a s econ d trial did not constitute the type of pre judice justifying de

nial of a motion to set

aside a judgment, the plaintiffs would be subjected to additional costs and ordered that defendants pay

those costs. 555 S.W.2d at 113. Tenn. R. Civ. P. 60.02 authorizes relief from a judgment “on such terms asare just.” In the case herein, we find it equitable and just that th

e Hara kases re imburse th

e Estate for its co sts associated

with the filing of the motion for default judgment and the hear in g on that motion. On remand, the trial

court sha ll determ ine those costs.
IV. Conclusion
For the fore going reason s, we reverse th e judgme nt of the tr

ial cour t, set asid e the def ault judgmen t, and remand thecase for any further proceedings which may be necessary . Costs of the appeal are taxed to the appellee, the Estate of Anthony D. Va nleer, for which execution may issue if ne ce ss ar y.

____________________________________ PATRICIA J. COTTREL L, JUDGE