Court Opinion

ID: 4412452
Source: CourtListenerOpinion
Date Created: 2019-06-28 16:47:06.167719+00
Date Added: 2024-06-11T13:32:00.058953
License: Public Domain

06/28/2019
                IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  May 20, 2019 Session

   ROY EDWARD BANE, EXECUTOR OF THE ESTATE OF MARTHA
            HARRISON BANE v. JOHN BANE ET AL.

                Appeal from the Chancery Court for Cocke County
            No. 2014-CV-103        Telford E. Forgety, Jr., Chancellor
                     ___________________________________

                           No. E2018-00790-COA-R3-CV
                       ___________________________________

The trial court granted a default judgment to the plaintiff in March 2009, which judgment
invalidated a deed for real property transferred from the plaintiff to her son and daughter-
in-law. The trial court subsequently set aside the default judgment without making
sufficient findings of fact and conclusions of law concerning the basis for the ruling.
Following a consequent bench trial, the trial court upheld the deed from the plaintiff to
her son, although the plaintiff sought to have the deed set aside based on undue influence
and fraud. The plaintiff has appealed. Based upon our determination that the trial court
failed to make sufficient findings of fact and conclusions of law in its order that set aside
the default judgment, we vacate both the trial court’s final order and the order setting
aside the default judgment. We remand this matter to the trial court for entry of sufficient
findings of fact and conclusions of law regarding the legal basis of the trial court’s
decision to set aside the default judgment, or, in the alternative, reconsideration of that
judgment.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                            Vacated; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which D. MICHAEL
SWINEY, C.J., and CHARLES D. SUSANO, JR., J., joined.

Thomas M. Leveille, Knoxville, Tennessee, for the appellant, Roy Edward Bane,
Executor of the Estate of Martha Harrison Bane.

J. Patrick Stapleton, Sevierville, Tennessee, for the appellees, John Bane; Anne Bane;
and Elizabeth Caldwell Kingery, Executor of the Estate of J. Alan Kingery.
                                              OPINION

                             I. Factual and Procedural Background

       On December 15, 2008, Martha Harrison Bane filed a “Complaint for Cancellation
of Deed Induced by Fraud and Undue Influence” (“first action”) against her son and
daughter-in-law, John and Anne Bane (“Defendants”) in the Cocke County Chancery
Court (“trial court”).1 In her complaint, Ms. Bane alleged that Defendants had exerted
undue influence over her and had fraudulently induced her to transfer a tract of real
property to them. Although all of the parties were residents of Virginia, the property in
question (“the Property”) is located in Cocke County, Tennessee.

       Ms. Bane asserted, inter alia, that at the time of the Property’s transfer in 2003,
John Bane was acting as her attorney-in-fact. Ms. Bane alleged that John Bane falsely
represented that she needed to sign the deed transferring title to the Property to
Defendants as part of Ms. Bane’s estate plan. Ms. Bane further alleged that Defendants
informed her the deed would be placed in a lock box and would not be recorded until
after her death. According to Ms. Bane, she had no intention of transferring title for the
Property to Defendants at the time she signed the deed; rather, she intended for them to
receive it only following her death.

       Ms. Bane further asserted that upon her discovery of the transfer of the Property,
she revoked the power of attorney granted to John Bane and demanded that he and his
wife convey title back to her. Upon John Bane’s refusal to do so, Ms. Bane filed this
action, seeking title to the Property, damages, and an award of attorney’s fees. A copy of
the deed transferring the Property to Defendants was attached to the complaint.

         On March 23, 2009, the trial court entered an order, finding that Defendants had
received proper service of process and had failed to answer the complaint or otherwise
appear. The court thus entered a default judgment, which set aside the deed from Ms.
Bane to Defendants. A Clerk and Master’s Deed was accordingly issued, transferring
title to the Property back to Ms. Bane.

        Ms. Bane subsequently instituted a separate action by filing a “Complaint for
Cancellation of Deed of Trust” (“second action”) with the trial court on August 27, 2014.
In this complaint, Ms. Bane named John and Anne Bane as defendants as well as J. Alan
Kingery, Anne Bane’s father. Ms. Bane alleged that on June 20, 2007, Defendants had
executed a Deed of Trust in favor of Mr. Kingery in the amount of $250,000, which
required no payments and set forth no associated interest rate. According to Ms. Bane,

1
 Because several of the parties and witnesses in this matter share the same surname, we will refer to the
mother, Martha Bane, as “Ms. Bane” and will refer to her children by their full names throughout this
opinion in order to avoid any confusion.
                                                  -2-
Mr. Kingery did not pay any money to Defendants upon the execution of the deed of
trust. Rather, Ms. Bane alleged that the trust deed was executed to create a cloud on the
title to the Property. Ms. Bane sought to have the deed of trust set aside.

        Mr. Kingery subsequently filed a motion to intervene in the first action, asserting
that he was an indispensable party thereto. In addition, Mr. Kingery and Defendants filed
motions to have the default judgment from the first action set aside.2 On March 30, 2015,
the trial court entered an order granting the motions to set aside the default judgment and
finding Mr. Kingery to be a necessary and indispensable party. Rather than granting Mr.
Kingery’s motion to intervene in the first action, the trial court consolidated the first
action with the second action, which permitted Mr. Kingery to proceed as a named party
and rendered the motion to intervene moot. The court entered a subsequent order on
September 15, 2015, allowing the intervention of the Martha Bane Trust as a party to the
consolidated cases.

        On October 13, 2016, Defendants and Mr. Kingery filed a joint motion seeking
sanctions against Ms. Bane for failing to appear for her scheduled deposition. The trial
court subsequently entered an order directing Ms. Bane to appear for a deposition within
thirty days. On December 8, 2016, Defendants and Mr. Kingery filed a renewed motion
for sanctions, claiming that Ms. Bane had appeared for a deposition on December 2,
2016, but that the deposition was not completed because Ms. Bane was not feeling well.
On July 11, 2017, Elizabeth Caldwell Kingery was substituted as a party in place of Mr.
Kingery, who had recently passed away.

       The trial court conducted a bench trial on February 6, 2018. The trial court then
entered a final order on February 12, 2018, wherein the court dismissed Ms. Bane’s
claims with prejudice. The Clerk and Master’s deed executed in 2009, which had
conveyed title for the Property to Ms. Bane, was set aside, as well as subsequent deeds
conveying the Property to the Martha Bane Trust. The court specifically upheld the deed
from Ms. Bane to Defendants and the deed of trust in favor of Mr. Kingery.

       In its memorandum opinion incorporated into the final judgment, the trial court
explained in pertinent part:

              The Court has listened to the evidence, which by the way is really in
       many respects confusing and just terribly convoluted, the dealings between
       the parties, terribly convoluted, but at the end of the day the Court is
       constrained to dismiss the complaint. The Court will explain its reasoning.

2
 Although the trial court’s March 30, 2015 order recites that these motions were filed, copies of the
motions have not been included in the appellate record.
                                                -3-
       First of all, [Ms. Bane] claims that Mr. John Bane held a power of
attorney for Martha Harrison Bane, which he did for sure, held a power of
attorney which was dated May 9, 2003. The deed made from Martha
Harrison Bane to John Bane was dated . . . October 20, 2003. John Bane
held a deed of trust, or rather a power of attorney for his mother Martha
Bane certainly in October of 2003. From the record here, the Court cannot
find that there had been any use of the power of attorney between the time
it was granted in May of 2003 and the time the deed was made in October
of 2003.

       There may have been use of the power of attorney after that, but
there’s no evidence in the record here that there was use of the power of
attorney between May and October. Accordingly, I don’t think the
presumption of undue influence by reason of a confidential relationship
between John Bane and Martha Bane, I don’t think that presumption arises
with respect to this transaction.

       I also note that there’s no evidence in the record that   the power of
attorney was used in connection with the very deed at issue.     Martha Bane
signed the deed herself. John Bane did not sign the deed         as power of
attorney for Martha Bane as grantor and himself as grantee.      Martha Bane
herself signed it.

      ***

Perhaps more importantly to the Court, there are a series of deeds in the
record beginning with Exhibit 15 and running through Exhibit 19, deeds
where -- deeds of gift, that’s what they’re styled, deeds of gift where
Martha Bane made deeds of gifts for real property to some of her children,
particularly Exhibit 15, a deed from Martha Bane to Philip Bane, one of her
sons.

       Another deed, Exhibit 16, from Martha Bane to Philip Bane. Again,
her son.

       Then Exhibit 17, a deed from Martha Bane to Martha B. Carnes.
Martha B. Carnes is a daughter of Martha Harrison Bane. It’s dated May
21, 2003.

      A deed July 7, 2003 between Martha Bane and Martha Carnes,
Exhibit 18.

                                   -4-
             A deed dated April 2, 2004 from -- again a deed of gift. All of these
      are styled deeds of gift. April 2nd, 2004 from Martha Bane to George
      Annis and Elizabeth Harrison Annis, A-n-n-i-s, Exhibit 19.

             And then in between those deeds, in the same time series, was the
      deed that’s at issue here, a deed to John Bane. What does that tell the
      Court? It tells the Court that Martha Bane, for whatever reason, reasons
      that were sufficient to her at the time, was making deeds for property she
      owned to her children, probably perhaps for estate planning purposes,
      perhaps just she wanted to go ahead and get it done before she died.
      Whatever her reasons, she was giving her property away to her children.
      And John Bane, by the way, wasn’t the only one. He was one of the ones,
      but he wasn’t the only one.

             The evidence also shows that at the same time she made a deed to
      John Bane for eight acres in Cosby, which by the way was the Harrison
      home place. At the same time she made that deed, she made another deed
      to her son Tom Bane. By the way, Tom Bane testified here and the Court
      was very much impressed with his credibility, I must say, just very much
      impressed with Tom Bane’s credibility.

       The trial court further explained that the survey map demonstrated that someone
had the property surveyed and divided it so that Tom Bane and John Bane received tracts
that were exactly the same size. The court also found that Tom Bane had testified that
Ms. Bane told him shortly after the transfer that she had deeded the Property to John
Bane and that he had begun work on it.

        According to the trial court’s findings, Tom Bane also testified that some years
later, in 2008, Ms. Bane called him and asked him to give the property back that she had
deeded to him. Tom Bane did so. Ms. Bane then filed the lawsuit against John Bane to
recover the Property. The court found that John Bane exerted no undue influence over
Ms. Bane. Rather, the court determined that a rift had developed among Ms. Bane’s
children, which originated with Roy Bane’s actions, causing Ms. Bane to change her
mind concerning the transfers of property.

       On February 28, 2018, Ms. Bane filed a motion to reopen the proof or to alter or
amend the judgment. The trial court denied the motion by order dated April 2, 2018.
Ms. Bane filed a notice of appeal on May 1, 2018. On September 14, 2018, Defendants
and Elizabeth Caldwell Kingery filed a “Suggestion of Death and Motion to Dismiss” in
this Court, stating that Ms. Bane had passed away on June 14, 2018. Roy Bane
subsequently filed a motion seeking to substitute himself, both as personal representative
of Ms. Bane’s estate and as trustee of the Martha Bane Trust, as the appellant in this
matter. This Court entered an order on October 30, 2018, denying the motion to dismiss
                                          -5-
and directing the clerk to substitute Roy Bane, executor of the Estate of Martha Harrison
Bane (“the Estate”), in place of Ms. Bane as the appellant.

                                II. Issues Presented
      The Estate presents the following issues for our review, which we have restated as
follows:

       1.     Whether the trial court erred by setting aside the default judgment
              entered against Defendants based upon the court’s finding that Mr.
              Kingery was an indispensable party.

       2.     Whether the trial court erred by excluding Ms. Bane’s deposition
              transcripts as evidence at trial.

       3.     Whether the trial court erred by finding that no confidential
              relationship existed between Ms. Bane and John Bane sufficient to
              give rise to a presumption of undue influence.

       4.     Whether the trial court erred by alternatively ruling that the evidence
              was sufficient to rebut the presumption of undue influence.

       5.     Whether the trial court erred by declining to find that Mr. Kingery’s
              trust deed was void for lack of consideration and was executed in an
              attempt simply to establish a lien on the title to the Property.

       6.     Whether the trial court erred by declining to grant Ms. Bane’s
              motion to reopen the proof or alter or amend the final judgment.

                                 III. Standard of Review

       Our review of the trial court’s judgment following a non-jury trial is de novo upon
the record with a presumption of correctness as to the trial court’s findings of fact unless
the preponderance of the evidence is otherwise. See Tenn. R. App. P. 13(d); Rogers v.
Louisville Land Co., 367 S.W.3d 196, 204 (Tenn. 2012). “In order for the evidence to
preponderate against the trial court’s finding of fact, the evidence must support another
finding of fact with greater convincing effect.” Wood v. Starko, 197 S.W.3d 255, 257
(Tenn. Ct. App. 2006) (citing Rawlings v. John Hancock Mut. Life Ins. Co., 78 S.W.3d
291, 296 (Tenn. Ct. App. 2001)). We review the trial court’s conclusions of law de novo
with no presumption of correctness. Hughes v. Metro. Gov’t of Nashville & Davidson
Cty., 340 S.W.3d 352, 360 (Tenn. 2011). The trial court’s determinations regarding
witness credibility are entitled to great weight on appeal and shall not be disturbed absent

                                           -6-
clear and convincing evidence to the contrary. See Morrison v. Allen, 338 S.W.3d 417,
426 (Tenn. 2011); Jones v. Garrett, 92 S.W.3d 835, 838 (Tenn. 2002).

       A trial court’s decision concerning whether a default judgment should be set aside
is reviewed by this Court under an abuse of discretion standard. See Patterson v.
SunTrust Bank, 328 S.W.3d 505, 509 (Tenn. Ct. App. 2010). As our Supreme Court has
explained:

        An abuse of discretion occurs when a court strays beyond the applicable
        legal standards or when it fails to properly consider the factors customarily
        used to guide the particular discretionary decision. A court abuses its
        discretion when it causes an injustice to the party challenging the decision
        by (1) applying an incorrect legal standard, (2) reaching an illogical or
        unreasonable decision, or (3) basing its decision on a clearly erroneous
        assessment of the evidence.

Lee Med., Inc. v. Beecher, 312 S.W.3d 515, 524 (Tenn. 2010) (internal citation omitted).

                                         IV. Default Judgment

       The Estate first argues that the trial court erred by setting aside the March 2009
default judgment entered against John and Anne Bane. The Estate posits that the trial
court erroneously determined that Mr. Kingery was a necessary and indispensable party
in the first action. The Estate further asserts that the motions seeking to set aside the
default judgment were untimely.

       Pursuant to Tennessee Rule of Civil Procedure 55.02, default judgments may be
set aside “[f]or good cause shown” and “in accordance with Rule 60.02.”3 Tennessee
Rule of Civil Procedure 60.02 provides in pertinent part:

        On motion and upon such terms as are just, the court may relieve a party or
        the party’s legal representative from a final judgment, order or proceeding
        for the following reasons: (1) mistake, inadvertence, surprise or excusable
        neglect; (2) fraud (whether heretofore denominated intrinsic or extrinsic),
        misrepresentation, or other misconduct of an adverse party; (3) the

3
  Despite the reference to Tennessee Rule of Civil Procedure 60.02 contained within Rule 55.02, this
Court has noted that “[a] party against whom a default judgment has been entered may seek relief from
that judgment by filing a motion to alter or amend the judgment under Tenn. R. Civ. P. 59 or a motion for
relief from judgment under Rule 60.” See Estate of Vanleer v. Harakas, No. M2001-00687-COA-R3-CV,
2002 WL 32332191, at *4 (Tenn. Ct. App. Dec. 5, 2002). Furthermore, as our Supreme Court has
explained, if the default judgment does not adjudicate all claims against all parties and, therefore, is not a
final judgment, the defaulting party may seek to have it set aside under Tennessee Rule of Civil Procedure
54.02. See Discover Bank v. Morgan, 363 S.W.3d 479, 491 (Tenn. 2012).
                                                    -7-
       judgment is void; (4) the judgment has been satisfied, released or
       discharged, or a prior judgment upon which it is based has been reversed or
       otherwise vacated, or it is no longer equitable that a judgment should have
       prospective application; or (5) any other reason justifying relief from the
       operation of the judgment. The motion shall be made within a reasonable
       time, and for reasons (1) and (2) not more than one year after the judgment,
       order or proceeding was entered or taken.

We note that courts should “construe requests for relief pursuant to Rule 60.02 much
more liberally in cases involving default judgment than in cases following a trial on the
merits.” Patterson, 328 S.W.3d at 512 (quoting Henry v. Goins, 104 S.W.3d 475, 481
(Tenn. 2003)).

       The party who seeks to set aside the default judgment has the burden of
demonstrating that he or she is entitled to relief. See Purdy v. Smith, No. M2012-02463-
COA-R3-CV, 2014 WL 2194451, at *3 (Tenn. Ct. App. May 23, 2014). In addition,
“a Rule 60.02 motion filed for reasons (1) or (2) must be filed no later than one year after
the judgment or order was entered.” Rogers v. Estate of Russell, 50 S.W.3d 441, 445
(Tenn. Ct. App. 2001). Although a motion filed pursuant to Rule 60.02(3), asserting that
the underlying judgment is void, has no time limitation, see Turner v. Turner, 473
S.W.3d 257, 269 (Tenn. 2015), all other motions made pursuant to Rule 60.02 must be
filed “within a reasonable time.” See Tenn. R. Civ. P. 60.02; Rogers, 50 S.W.3d at 445.

       Relief from a default judgment is typically sought due to allegations of “mistake,
inadvertence, surprise or excusable neglect.” See, e.g., Discover Bank v. Morgan, 363
S.W.3d 479, 491-92 (Tenn. 2012); Patterson, 328 S.W.3d at 511. In that context,
regardless of whether relief from a default judgment is sought under Rule 54, 59, or 60,
the trial court must determine (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. See Discover Bank, 363 S.W.3d at 492; Tenn.
Dep’t of Human Servs. v. Barbee, 689 S.W.2d 863, 866 (Tenn. 1985). The primary
consideration, however, is whether the defaulting party’s conduct was willful. See
Discover Bank, 363 S.W.3d at 492-93.

       In the case at bar, the trial court found in the order granting default judgment that
Defendants had been properly served with process in the first action via certified mail and
that notice was also published in the local newspaper. Nearly five and one-half years
later, Defendants and Mr. Kingery filed motions seeking to set aside the default
judgment. The trial court granted the motions by order dated March 30, 2015, stating as
the sole basis for its ruling that “J. Alan Kingery was a necessary and indispensable party
to the action [filed in 2008 by Ms. Bane] but was not named or otherwise noticed by the

                                           -8-
Plaintiff in that cause.” The trial court provided no factual findings or legal analysis to
support this conclusion.4

       As previously noted, the motions seeking to have the default judgment set aside
are not included in the appellate record before us. However, inasmuch as the default
judgment had become final, we presume that the motions were filed pursuant to
Tennessee Rule of Civil Procedure 60.02 rather than Rule 59 or 54. That being
considered, the record contains no other information concerning the legal basis for the
motions or whether such motions were timely filed. The motions were clearly not filed
within one year of the grant of default judgment, and the trial court made no findings
regarding whether the motions were filed within a reasonable time or whether the
underlying judgment was void.5 In fact, the trial court’s order contains no discussion of
the timeliness of the motions whatsoever.

       Due to the absence of sufficient factual findings and legal conclusions in the trial
court’s order setting aside the default judgment, we conclude that the trial court’s March
30, 2015 order setting aside the default judgment should be vacated. We note that
Tennessee Rule of Civil Procedure 52.01 provides in pertinent part:

        In all actions tried upon the facts without a jury, the court shall find the
        facts specially and shall state separately its conclusions of law and direct
4
  We have located no authority for the proposition that a default judgment must be set aside due to the
failure to join an indispensable party except in instances where the failure to join an indispensable party
affects the trial court’s subject matter jurisdiction, such as in a declaratory judgment action. See Tenn.
Code Ann. § 29-14-107; Tenn. Farmers Mut. Ins. Co. v. Debruce, No. E2017-02078-COA-R3-CV, 2018
WL 3773912, at *1 (Tenn. Ct. App. Aug. 9, 2018), perm. app. granted (Tenn. Jan. 16, 2019). Ms. Bane’s
complaint in the first action did not rely upon the declaratory judgment statute.

Because the trial court did not indicate its basis for determining that Mr. Kingery was a necessary and
indispensable party to the first action, we have no ability to review that conclusion. We note, however,
that as our prior decisions have demonstrated, although a “trustee named in a trust deed is a proper party
to a suit involving lands subject to the trust indenture,” a proper party “is not the same as a necessary or
indispensable party.” See Brewer v. Lawson, 569 S.W.2d 856, 858 (Tenn. Ct. App. 1978); see also
Campbell v. Miller, 562 S.W.2d 827, 831 (Tenn. Ct. App. 1977). “Only a party who will be directly
affected by a decree and whose interest is not represented by any other party to the litigation is an
indispensable or necessary party, that is, one without which no valid decree may be entered settling the
rights between the parties that are before the [c]ourt.” Brewer, 569 S.W.2d at 858.
5
  We note that a void judgment is one wherein the rendering court lacked subject matter jurisdiction or
personal jurisdiction of the parties, or one that is “wholly outside the pleadings.” See Turner, 473 S.W.3d
at 270 (quoting Gentry v. Gentry, 924 S.W.2d 678, 680 (Tenn. 1996)). Moreover, the judgment’s
invalidity must be apparent from “the face of that judgment, or in the record of the case in which the
judgment was rendered.” See Turner, 473 S.W.3d at 270 (quoting Giles v. State ex rel. Giles, 235 S.W.2d
24, 28 (Tenn. 1950)). If the defect is not apparent from the face of the judgment or the record and must
be established by additional proof, the judgment is “merely voidable, not void.” See Turner, 473 S.W.3d
at 271.
                                                   -9-
       the entry of the appropriate judgment. . . . If an opinion or memorandum of
       decision is filed, it will be sufficient if the findings of fact and conclusions
       of law appear therein.

We have determined that the March 30, 2015 order contains insufficient findings and
conclusions to determine or review the basis for the trial court’s ruling that the default
judgment should be set aside. Moreover, the order contains no findings or conclusions
concerning the timeliness of the motions seeking to set aside the default judgment.

       As this Court has explained concerning the requirements of Rule 52.01:

       Rule 52.01 of the Tennessee Rules of Civil Procedure requires the trial
       court to state expressly its findings of fact and conclusions of law, even
       where the parties do not request it. Tenn. R. Civ. P. 52.01. If the trial court
       fails to do so, its decision is normally vacated and the cause remanded for
       such findings and conclusions; however, the appellate court may, in some
       circumstances, “soldier on” in the absence of them.

In re S.J., 387 S.W.3d 576, 594 n.9 (Tenn. Ct. App. 2012) (internal citation omitted)
(emphasis added). We do not believe that this is an appropriate case in which to “soldier
on” in the absence of appropriate findings and conclusions, particularly when the issue of
timeliness was not specifically addressed by the trial court. We therefore conclude that
the trial court’s final order, as well as its March 30, 2015 order setting aside the default
judgment, should be vacated.

                                   V. Remaining Issues

        Having determined that the trial court’s orders should be vacated, we conclude
that the remaining issues presented by the Estate are pretermitted as moot.

                                      VI. Conclusion

       For the foregoing reasons, we vacate the trial court’s final order and its March 30,
2015 order setting aside the default judgment. We remand this matter to the trial court
for entry of sufficient findings of fact and conclusions of law regarding the legal basis of
the trial court’s decision to set aside the default judgment, or, in the alternative,
reconsideration of that order. We also remand for consideration of any remaining issues
and collection of costs assessed below. Costs on appeal are taxed to the appellees: John
Bane; Anne Bane; and Elizabeth Caldwell Kingery, Executor of the Estate of J. Alan
Kingery.

                                                     _________________________________
                                                     THOMAS R. FRIERSON, II, JUDGE
                                            - 10 -