Court Opinion

ID: 1073623
Source: CourtListenerOpinion
Date Created: 2013-10-09 20:00:03.198266+00
Date Added: 2024-06-11T12:06:18.324095
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                                  AT NASHVILLE
                                            JULY 13, 2000 Session

             RICHARD I. GELDREICH, ET AL. v. ,JOHN D. HALL, III, ET AL.

                      Direct Appeal from the Chancery Court for Dickson County
                        No. 5459-98;The Honorable Leonard W. Martin, Judge

                        No. M1999-02258-COA-R3-CV - Filed October 20, 2000

This appeal arises from a suit initiated by Geldriech (AInvestors@) alleging breach of fiduciary duty, fraud,
and conversion by Hall in his capacity as corporate officer. When Hall failed to answer and appear for
hearing, Investors= motion for default judgment was granted. Thereafter, Hall filed a motion to strike the
default judgment that was denied by the court below. Hall appeals the trial court=s failure to grant him
relief from the default judgment.

       Tenn. R. App. P. 3; Appeal as of Right; Judgment of the Chancery Court Affirmed

ALAN E. HIGHERS, J., delivered the opinion of the court, in which W. F RANK CRAWFORD, P.J., W.S., and
PATRICIA J. COTTRELL, J., joined.

John D. Hall, III, pro se

Daniel C. Masten, for the Appellees

                                         MEMORANDUM OPINION 1

       Appellees (AInvestors@) were investors in Universal Graphics, Inc. (AUGI@), a Tennessee
corporation. When Investors initially invested in UGI, UGI was under Hall=s control. On May 29, 1997,

         1
           RULE 10. (Court of Appeals) (b) Memorandum Opinion. The Court, with the concurrence of all judges
participating in the case, may affirm, reverse or modify the actions of the trial court by memorandum opinion when a formal
opinion would have no precedential value. When a case is decided by memorandum opinion it shall be designated
AMEMORANDUM OPINION,@ shall not be published, and shall not be cited or relied on for any reason in a subsequent
unrelated case.
UGI became unable to meet its debt obligations leading Hall and the other officers and directors to initiate
Chapter 11 bankruptcy proceedings.

        During the bankruptcy proceeding, Hall was removed from corporate management on the grounds
of fraud, defalcation, and breach of fiduciary duty. An operating trustee was appointed to oversee the
corporate assets of UGI. Subsequently, UGI=s assets were liquidated and purchased by Graphics
Network, Inc. (GNI). GNI also purchased any and all causes of action available to UGI against the trustee
or former UGI corporate management. GNI sold the right to pursue these causes of action to Investors.

         On May 12, 1998, Investors filed suit against Hall2 in the Dickson County Chancery Court alleging
conversion of corporate assets, fraud and breach of fiduciary duty. Thereafter, Hall, as a pro se defendant,
filed a Motion for Hearing to Determine Propriety of Complaint. Hall asserted the trial court proceeding
should be stayed because of the bankruptcy. In addition, Hall claimed Investors were inappropriately
attempting to pierce the corporate veil. In the interim, Investors filed a motion for judgment by default based
on Hall=s failure to answer Investors= complaint. Following a hearing on Hall=s motion on July 29, 1998,
the trial court denied the relief requested by Hall. Investors were instructed to prepare an order to that
effect. At this time the Chancellor also warned Hall that he was subject to default judgment due to his
failure to answer Investors= complaint.

         On August 13, 1998, Investors sent a copy of the unsigned order and a motion for default judgment
to Hall. The motion for default judgment was set for hearing on October 1, 1998. Investors received an
answering letter from Hall sometime during August. The letter acknowledged receipt of Athe unsigned
copies of the Orders.@ Hall claims to have received the order regarding the July 29 hearing, but denies
receiving the motion for default judgment even though they were both in the same envelope.

         On October 1, 1998, a default judgment was entered against Hall based on his failure to file an
answer or appear for the default judgment hearing. Investors prepared and mailed a copy of the order of
default to Hall and the Clerk on October 7, 1998. Hall denies that he received this order.     An ex-
parte hearing on damages was held on December 15, 1998. Following the hearing, Investors were
awarded a judgment against Hall in the amount of $658,000. An unsigned order to this effect was sent to
Hall on January 3, 1999.

        On February 5, 1999, Hall filed motions to strike the orders of July 29, 1998, October 1, 1998,
and January 1999. Hall based these motions on a disability he suffered as a result of a mild stroke he
suffered in April 1998. Hall also denied receiving copies of either the motion for default judgment or the
order granting default judgment to Investors. A medical report attached to Hall=s affidavit, and dated July
6, 1998, stated that his Acognitive functions and affect seem normal.@ Hall also filed a Motion to Set
Aside Default Judgment for excusable neglect as provided in Rule 60 of the Rules of Civil Procedure. This
motion is unsworn and unsupported by any affidavits.

         2
          Hall=s wife, Dorothy Massey, was a named defendant in the action. A default judgment was entered against Massey.
Although she does not appeal individually, Hall appeals Aet ux,@ thereby including Massey in his appeal.
         On February 18, 1999, Hall filed an answer and counter-complaint to Investors= May 12, 1998
complaint. A hearing on Hall=s motions to strike was held on June 1, 1999. The Chancellor ruled that even
if Hall did not receive the default judgment motion and order, he was not excused from following the rules of
procedure. In addition, Hall had failed to show any unethical or fraudulent behavior by Investors= attorney.
 Hall failed to meet his burden of showing that his negligence in failing to defend himself in the suit was
excusable. Accordingly, Hall=s motions were denied and the default judgment was not set aside.

          Hall appeals.
                                                              Analysis

         As a preliminary matter, we find it necessary to address Hall=s position as a pro se litigant. Hall
represented himself both during the proceedings below and on appeal. While litigants who proceed pro se
are entitled to fair and equal treatment, "they must follow the same procedural and substantive law as the
represented party." Irvin v. City of Clarksville, 767 S.W.2d 649, 652 (Tenn. Ct. App.1988). Indeed, a
pro se litigant requires even greater attention than one represented by counsel. The trial judge must
accommodate the pro se litigant's lack of legal knowledge without giving the pro se litigant an unfair
advantage because the litigant represents himself. Id. From our reading of the record, the trial court made
every available concession required to accommodate Hall=s pro se status. On appeal, Hall failed to cite to
any law supporting his position or to provide a clear statement of the issue. For the foregoing reason, we
limit our review to the appropriateness of the trial court=s refusal to set aside the default judgment.

                                                       Default Judgment

         On appeal, Hall claims that the trial court erred in failing to set aside the default judgment. Hall
asserts that, due to a mild stroke, he was unable to take action to prevent the entry of the judgment by
default. Therefore, Hall claims that the default judgment should be set aside on the grounds of excusable
neglect. We do not agree.

          Rule 60.02 provides in part, A[T]he 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.@ TENN. R. C IV. P. 60.02. The burden is on the party seeking relief "to show that he [or
she] is entitled to relief." Trice v. Moyers, 561 S.W.2d 153, 156 (Tenn.1978); Spruce v. Spruce, 2
S.W.3d 192, at 194 (Tenn. Ct. App. 1998). In order to succeed, the moving party must describe the basis
for relief with specificity, and must show by clear and convincing evidence that it is entitled to relief based on
one of the grounds in 60.02 and that it has a meritorious defense to the plaintiff's suit.3 TENN. R. CIV. P.

          3
           Movant should set forth in a motion, petition, or in supporting affidavits, facts explaining why he was justified in failing to
avoid mistake, inadvertence, surprise of neglect. Turner v. Turner, 776 S.W.2d 88 (Tenn. Ct. App. 1987).

                                                                  -3-
55.02; Patterson v. Rockwell Int'l, 665 S.W.2d 96, 100 (Tenn.1984); Davidson v. Davidson, 916 S.W.2d
918, 923 (Tenn. Ct. App.1995); Hopkins v. Hopkins, 572 S.W.2d 639, 640 (Tenn.1978).
         A motion for relief based on Rule 60.02 grounds addresses itself to the sound discretion of the trial
judge. Therefore, the scope of review of this Court is limited to determining whether the trial court abused
its discretion. Underwood v. Zurich Ins. Co., 854 S.W.2d 94 at 97 (Tenn.1993). After reviewing the
record before us, we conclude that the trial court did not abuse its discretion in denying Hall=s motion to set
aside the default judgment. Hall failed to provide supporting affidavits to his motion to set aside. Hall failed
to show why he was justified in his negligence to answer Investors= complaint prior to entry of the judgment
by default. In addition, even if Hall=s neglect was excusable, Hall failed to show that he had a meritorious
defense to Investors= suit. Accordingly, the trial court=s refusal to set aside the default judgment against
Hall is affirmed.

                                                 Conclusion

       Based on the foregoing, the decision of the trial court is affirmed. Costs of this appeal are taxed to
Appellant, John D. Hall, III, et ux., for which execution may issue if necessary.

                                                            ___________________________________
                                                            ALAN E. HIGHERS, JUDGE

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