Opinion ID: 1043964
Heading Depth: 3
Heading Rank: 5

Heading: Test for Relief

Text: Having affirmed the proper rule to be used when seeking revisions to a non-final order, we next consider what test for relief should apply. [20] We recognized in Harris that we had not articulated a standard for courts to apply when ruling on motions filed pursuant to Rule 54 to set aside partial summary judgments, but we noted that other states had applied Rule 59 standards when evaluating such motions under Rule 54. Harris, 33 S.W.3d at 744 (citing Thomas v. Swindle, 676 So.2d 333, 335 (Ala.Civ.App. 1996)). While no Tennessee case has enunciated the proper test for motions seeking relief from non-final default judgments, [21] following the lead of Harris, we find it appropriate to look to cases applying Rule 59 to motions for relief from final judgments by default. In Campbell v. Archer , where neither the defendants nor their counsel had notice of the trial date until it began without them, the trial court refused permission to approach the bench upon their arrival, and the jury returned a verdict for the plaintiffs. 555 S.W.2d at 111-12. The defendants sought a new trial on the grounds that their failure to appear was, at most, excusable neglect, and that the judgment against them was a default within the meaning of Rule 55.01, entitling them to notice they had not received. Id. at 112. We held that, regardless of whether such a judgment is a default, the defendants met the burden for relief under Rule 59. Id. Specifically, we found that (1) the absence had not been willful, (2) the defendants alleged a meritorious defense, and (3) a new trial would not prejudice the plaintiffs. Id. at 112-13. As all three factors favored relief, Campbell did not discuss whether any particular factor was necessary or sufficient. Soon thereafter, we adopted the same test for evaluating Rule 60.02(1) motions for relief from default judgments on excusable neglect grounds, consistent with the federal paradigm: In applying Rule 60(b)(1) [of the Federal Rules of Civil Procedure] in the context of default judgments, courts have gone beyond the bare wording of the rule and established certain criteria which should be considered in deciding whether the designated standards have been satisfied. These criteria ... include (1) whether the default was willful; (2) whether the defendant has a meritorious defense; and (3) the level of prejudice that may occur to the non-defaulting party if relief is granted. Tenn. Dep't of Human Servs. v. Barbee, 689 S.W.2d 863, 866 (Tenn. 1985) (quoting Davis v. Musler, 713 F.2d 907, 915 (2d Cir. 1983)). [22] In Barbee, a paternity action, the defaulting party did not seek relief until three months after the default judgment resolved the one and only claim between the parties. Id. at 864-65. As more than thirty days had passed since the entry of final judgment, we applied Rule 60.02(1), but we also found it immaterial which rule technically governed: While the Campbell case involved a motion for a new trial under Rule 59 of the Tennessee Rules of Civil Procedure, the analysis employed by the Court in that case is equally applicable to the facts involved in the case at bar. Id. at 867. [23] As the Court of Appeals has noted, Rule 59.04 and Rule 60.02(1) each provide a vehicle for seeking relief from orders entered as a result of `mistake, inadvertence, or excusable neglect' by a party's counsel. Ferguson v. Brown, 291 S.W.3d 381, 387 (Tenn.Ct.App. 2008) (quoting Campbell, 555 S.W.2d at 112). Together with his motion to set aside the default judgment, the defendant in Barbee filed an affidavit in which he denied paternity and stated that neither he nor his attorney had received notice of the trial, which established his paternity of the child in question. In opposing the motion to set aside, the plaintiff made no claim that it would suffer prejudice if the motion were granted. On this record, we found that all three factors favored relief: There has been no showing that the plaintiff suffered any prejudice when the trial court set aside the default.... The record demonstrates that the defendant had a meritorious defense to the plaintiff's claims.... Moreover, there is no proof in the record that the defendant's default was culpable or willful. Barbee, 689 S.W.2d at 868. As in Campbell, therefore, we did not discuss whether any particular factor was dispositive. While most federal circuits employ a test similar to that of Barbee for deciding whether relief from a default judgment should be granted on excusable neglect grounds pursuant to Federal Rule of Civil Procedure 60(b)(1), [24] many decisions from these circuits do not articulate how the three enumerated factorswillfulness (or culpability), a meritorious defense, and prejudiceshould be weighed relatively to one another, e.g., Effjohn Int'l Cruise Holdings, Inc., 346 F.3d at 563. Recent cases, however, tend to treat willful or culpable conduct as dispositive. Jenkens & Gilchrist v. Groia & Co., 542 F.3d 114, 122 (5th Cir. 2008) (If [defendant's] default was willful then the district court's denial of [Federal Rule of Civil Procedure] 60(b)(1) relief may be affirmed on that ground alone.); Franchise Holding II, LLC, 375 F.3d at 926 (holding that the trial court's finding that defendant's culpable conduct led to the default suffices to deny reliefindependent of other factors). We think the better view is to condition relief from a default judgment, whether final or interlocutory, on a finding that the defaulting party did not act willfully. Before today, we have not clearly held that willfulness is a threshold inquiry, but we have implied as much. Campbell, 555 S.W.2d at 113 (The facts make out a case of mistake, inadvertence, or excusable neglect, rather than one of willful failure to appear.). Moreover, the Court of Appeals has recognized the incompatibility of willfulness and excusable neglect in several unpublished opinions. See, e.g., Hayes v. Hayes, No. M2006-02356-COA-R3-CV, 2007 WL 2580026, at  (Tenn.Ct. App. Sept. 6, 2007) (An attorney's negligence may constitute excusable neglect under Tenn. R. Civ. P. 60.02(1) so long as that conduct is not willful. (citing Henry, 104 S.W.3d at 481; Barbee, 689 S.W.2d at 866)). Thus, untimely filings or missed court dates may constitute excusable neglect when due to an attorney's carelessness or inattention. See, e.g., Barbee, 689 S.W.2d at 865 (counsel neglected to check mail); Campbell, 555 S.W.2d at 113 (counsel neglected to read notice). On the other hand, deliberate choices amount to willful conduct. Barber & McMurry, Inc. v. Top-Flite Dev. Corp., 720 S.W.2d 469, 471 (Tenn.Ct.App. 1986) (counsel chose not to attend trial due to scheduling conflict). Willfulness also includes conduct that is flagrant and unexplained. Hayes, 2007 WL 2580026, at  (citing Munday v. Brown, 617 S.W.2d 897 (Tenn.Ct.App. 1981)); see also McBride v. Webb, No. M2006-01631-COA-R3-CV, 2007 WL 2790681, at  (Tenn.Ct.App. Sept. 25, 2007) ([Defendant] read the summons and did nothing to respond to the Complaint as directed by the summons. This is willful conduct.). [25] The Munday case illustrates this concept. In Munday, involving a boundary dispute, the defendant's attorney made an appearance, raised the defense of adverse possession, and successfully opposed the plaintiff's request for a preliminary injunction. 617 S.W.2d at 898. A trial date was scheduled and rescheduled several times. Id. Defendant's counsel failed to appear at trial, despite having been served with various motions and orders during the interim. Id. While the defendant, through counsel, eventually moved to set aside the default judgment, she offered no explanation for why her attorney failed to appear at trial; rather, she argued that she personally lacked notice. Id. at 899. In upholding the trial court's denial of relief, the Court of Appeals noted that on no less than ten occasions counsel for the defendant was served with ample warning that if his client intended to further defend plaintiff's suit that action in that regard must be taken. Id. at 898. [26] Today we clarify that when a party seeks relief from a default judgment due to excusable neglect, whether pursuant to Rule 54.02 (for interlocutory judgments), Rule 59.04 (for final judgments within thirty days of entry), or Rule 60.02 (for final judgments more than thirty days after entry), a reviewing court must first determine whether the conduct precipitating the default was willful. If the court finds that the defaulting party has acted willfully, the judgment cannot be set aside on excusable neglect grounds, and the court need not consider the other factors. [27] If the conduct was not willful, however, then the court must consider whether the defaulting party has a meritorious defense and whether the non-defaulting party would be prejudiced by the granting of relief. The court may also consider any other factor that it deems relevant. We recognize that the interest in finality is heightened once a final judgment has been entered. While the same factors must guide the inquiry, relief from a partial default judgment may be granted more liberally under Rule 54.02 than relief from final default judgments under Rule 59.04 or Rule 60.02. Cf. Dayton Elec. Mfg. Co., 140 F.3d at 783 (holding that the same factors apply when relief is sought from a final judgment, Fed.R.Civ.P. 60(b), as from a mere entry of default, Fed.R.Civ.P. 55(c), but that relief should be granted more liberally where no final judgment has been entered).