Court Opinion

ID: 1050048
Source: CourtListenerOpinion
Date Created: 2013-10-08 19:58:14.673264+00
Date Added: 2024-06-11T15:07:10.557653
License: Public Domain

IN THE COURT OF APPEALS OF TENNESSEE
                           AT KNOXVILLE
                                  April 19, 2010 Session

                      DISCOVER BANK v. JOY A. MORGAN

                   Appeal from the Circuit Court for Sevier County
                    No. 2006-0172-II    Richard R. Vance, Judge

                No. E2009-01337-COA-R3-CV - FILED MAY 19, 2010

This lawsuit began as a collection claim filed by Discover Bank (“Discover”) against Joy A.
Morgan (“Morgan”) for $16,341.52. Discover claimed Morgan owed this amount on a credit
card originally issued to Morgan’s husband, now deceased. Morgan filed an answer and
counterclaim, asserting a claim for libel as well as claims pursuant to the federal Fair Credit
Reporting Act, 15 U.S.C. § 1681, and the Tennessee Consumer Protection Act, Tenn. Code
Ann. § 47-18-101, et seq. Morgan’s attorney gave Discover’s original attorney an extension
of time in which to file an answer to the counterclaim. After this extension of time had run,
Morgan’s attorney warned Discover’s attorney that a motion for default judgment would be
filed if an answer was not filed within fourteen days. When Discover failed to file an answer
within the fourteen days, Morgan filed a motion for default judgment. Discover’s attorney
failed to show up for the hearing and a default judgment was awarded to Morgan. Discover
filed a Motion to Set Aside Default Judgment “pursuant to Rule 60.02. . . .” This motion was
denied. Following a later hearing on damages, Morgan was awarded compensatory damages
totaling $125,200, which the Trial Court then trebled under the Tennessee Consumer
Protection Act. After obtaining new counsel, Discover filed a motion to alter or amend the
judgment, which was denied. Discover now appeals. We affirm the Trial Court’s Order
denying Discover’s motion to alter or amend the judgment and set aside the default
judgment. We, however, vacate the award of damages and remand for a new hearing on the
amount of damages and also to determine reasonable attorney fees incurred by Morgan on
appeal.

            Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit
            Court Affirmed in Part and Vacated in Part; Case Remanded

D. M ICHAEL S WINEY, J., delivered the opinion of the court, in which H ERSCHEL P. F RANKS,
P.J., and C HARLES D. S USANO, J R., J., joined.
Gary C. Shockley, Nashville, Tennessee, and Ronald S. Range, Jr., Johnson City, Tennessee,
for the Appellant, Discover Bank.

Jennifer L. Chadwell, Oak Ridge, Tennessee, for the Appellee, Joy A. Morgan.

                                        OPINION

                                      Background

              This lawsuit began in 2006 when Discover sued Morgan claiming she was
responsible for debts incurred on a Discover credit card in the amount of $16,341.52. The
primary account holder was Morgan’s husband, who was deceased when the lawsuit was
filed. Discover sought a judgment for $16,341.52, plus interest and attorney fees.

                Morgan filed an answer and counterclaim. In her answer, Morgan denied being
liable for the amount owed on the credit card. According to Morgan, she never entered into
any contractual arrangement with Discover. Morgan claimed that while she was an
authorized user on the credit card, the card had been issued to Sidney Morgan, her late
husband. Morgan generally denied any liability to Discover. In her counterclaim, Morgan
alleged that her late husband was the primary and only account holder, although she again
acknowledged that she was an authorized user on the card. Morgan claimed that pursuant
to the Card Member Agreement, the primary account holder was liable for any and all
charges made on an account by an authorized user, but not vice versa. Morgan denied ever
entering into any contract with Discover.

               According to Morgan, she initially was informed by Discover after her
husband’s death that she would not be responsible for the outstanding balance. She was
instructed to send Discover a copy of her husband’s death certificate, which she did.
Notwithstanding what she was told, Discover began pursuing collection efforts against
Morgan. Morgan asserted that Discover called her on a daily basis and sent collection
notices to her home. Morgan further alleged:

                     Discover Bank’s attorney was contacted by Mrs.
              Morgan’s counsel [who] informed Discover Bank’s counsel that
              Mrs. Morgan was not a joint account holder on this account, but
              an authorized user only and according to the terms of Discover
              Bank’s own agreement, [she was] not liable on this account.

                                            -2-
              However, Discover Bank continued to pursue collection of this
              account against Mrs. Morgan.

                      In pursuing payment of this account from Mrs. Morgan,
              Discover Bank reported the nonpayment of this account to the
              credit reporting agency. This account had been placed on her
              credit report and has seriously injured Mrs. Morgan’s credit
              rating.

                     Due to the presence of the collection action on Mrs.
              Morgan’s credit report, and injury to her credit score due to
              Discover Bank’s actions, Mrs. Morgan has been unable to
              refinance her property as she had anticipated at a lower interest
              rate. She has continued to pay a higher interest rate on her
              mortgage due to her inability to be approved for refinancing at
              a lower rate. Chase Home Finance refused to refinance her
              property due to her credit score not being at least 660. Prior to
              the collection actions reported by Discover Bank to the credit
              reporting agency, Mrs. Morgan would have qualified for this
              refinancing. The refinancing of her property would have
              lowered her interest rate from an 8%, 15 year variable interest
              rate to a fixed 30 year, 6.25% interest rate and would have
              lowered her monthly mortgage payments by at least $200.00 a
              month for at least 15 years.

                     Due to Discover Bank reporting the collection actions to
              the credit reporting agency, other credit companies have
              cancelled Mrs. Morgan’s credit with them. Specifically, in July
              2005, MBNA closed three accounts Mrs. Morgan had with
              them. Mrs. Morgan’s available credit at the time of the closing
              of these accounts was $31,500.00. . . . Prior to the reporting of
              [Discover’s] account to the credit reporting agencies, Mrs.
              Morgan had $123,400.00 available credit. After this account
              was reported as delinquent by Discover, her credit accounts had
              [been reduced to] . . . $18,000.00.

                In addition to the foregoing, Morgan claimed that due to the delinquency being
reported to the credit agencies, the interest rate on one of her credit cards was increased from
11.24% to 29.99%. Morgan brought various claims against Discover, including a claim for
libel, violation of the federal Fair Debt Collections Practices Act, 15 U.S.C. § 1692, et seq.,

                                              -3-
violation of the federal Fair Credit Reporting Act, 15 U.S.C. § 1681, and violation of the
Tennessee Consumer Protection Act, Tenn. Code Ann. § 47-18-101, et seq.1

               Morgan’s answer and counterclaim were filed on January 31, 2007. When no
timely answer to the counterclaim was filed, then attorney for Discover, John M. Richardson,
Jr., (“Richardson”)2 , requested of and was granted by Morgan’s attorney an extension up to
and including April 2, 2007, in which to file an answer to the counterclaim. When no answer
was filed by the new agreed-upon due date, Morgan’s attorney sent a letter to Richardson
informing him that a motion for default judgment would be filed if Discover’s answer was
not received within fourteen days. When that fourteen day period elapsed and still no answer
was forthcoming, Morgan filed a motion for default judgment on May 4, 2007. A hearing
on the motion for default judgment was scheduled for May 22, 2007. Discover’s attorney,
Richardson, received proper notice of the hearing, but on the day of the hearing, Richardson
failed to attend. In addition, Discover still had not filed an answer to the counterclaim and
had filed no response to the motion for default judgment. Not surprisingly, the Trial Court
granted Morgan’s motion for default judgment as to liability and informed Morgan that a
hearing on damages would be scheduled in the near future. The order granting the motion
for default judgment as to liability was entered the same day of the hearing, i.e., May 22,
2007.

              On June 8, 2007, Discover filed a motion to set aside the default judgment
pursuant to Tenn. R. Civ. P. 60.02. In this motion, Discover claimed that Richardson made
an “inadvertent error” and documented the wrong hearing date on his calendar. Discover
claimed that “[t]his type of inadvertent error is excusable pursuant to Rule 60.02 of the
Tennessee Rules of Civil Procedure.” No affidavit was filed in support of this motion.

               Morgan responded to the motion to set aside default judgment. Morgan argued
the motion to set aside should be denied because: (1) the counterclaim was filed on January
31, 2007; (2) Discover received an extension until April 2, 2007, in which to file its answer
to the counterclaim; (3) when no answer was filed by April 2, 2007, counsel for Morgan sent
a letter to Richardson on April 13, 2007, advising him that if an answer was not received
within the next fourteen days, a motion for default judgment would be filed; (4) when that

        1
            Morgan eventually dismissed her claim brought pursuant to the Fair Debt Collections Practices Act.
        2
           Attorney John M. Richardson, Jr., works with attorney Steven T. Richardson at the John M.
Richardson, Jr., P.C. law firm in Clarksville. The vast majority of the signature lines on pleadings filed by
Discover before retaining new counsel contained one signature line, but had both the names of John M.
Richardson Jr., and Steven T. Richardson typed under that line. The signature is very difficult to read, but
it appears that the pleadings were being signed by John M. Richardson, Jr., although Steven Richardson was
the attorney representing Discover at the hearing on April 29, 2008 discussed later in this Opinion.

                                                      -4-
fourteen day period elapsed and still no answer was received, the motion for default
judgment was filed on May 4, 2007; (5) as of May 22, 2007, which was the day of the
hearing on the motion for default judgment, no response had been filed either to the
counterclaim or to the motion for default judgment; and (6) neither Discover nor its attorney
were present at the May 22 hearing even though proper notice had been sent. Morgan also
argued in her response that calendar errors were not properly considered excusable neglect
under Rule 60.

                Over one year after the counterclaim was filed, on February 18, 2008,
Richardson filed an answer to the counterclaim on Discover’s behalf. That same day,
Discover filed an amended motion to set aside the default judgment “pursuant to Rule 60 of
the Tennessee Rules of Civil Procedure. . . .” Discover claimed that Morgan held herself out
as the primary account holder on the Discover card, and that on September 14, 2004,
Discover approved a balance transfer of $14,500 from a Chase credit card. Discover asserted
that this transfer occurred after Morgan’s husband had passed away. Discover further alleged
that Morgan continued to use the Discover card after her husband’s death, including for the
purchase of airline tickets.

               Morgan responded to the amended motion to set aside default judgment,
claiming that her husband had initiated a balance transfer from the Discover card to a Chase
card prior to his death. Morgan claimed that since her husband had just died, she thought it
was appropriate to transfer the money back to the Discover card. Morgan admitted that she
had purchased airline tickets on the Discover card after her husband’s death.

              In March of 2008, Morgan filed a motion to dismiss the original complaint
filed against her by Discover. According to Morgan, the “allegations contained in the
Complaint filed by Discover Bank and the allegations contained in the Counter-Complaint
are mutually exclusive of one another.” Because a judgment for Morgan had already been
entered on the counterclaim, Morgan asserted that the original complaint filed by Discover
must be dismissed. The Trial Court agreed and on March 20, 2008, it dismissed the original
complaint filed by Discover. Discover filed a motion to set aside the dismissal of its
complaint, but that motion was denied.

               On April 4, 2008, the Trial Court entered an order denying Discover’s motion
to set aside the default judgment. The Trial Court noted that the basis upon which Discover
was attempting to set aside the default judgment was “excusable neglect.” The Trial Court
then stated that failing to timely file an answer and failing to appear at the default hearing did
not constitute “excusable neglect.”

                                               -5-
              A hearing on Morgan’s request for damages was conducted on April 29, 2008.
Following that hearing, the Trial Court entered an order awarding Morgan actual damages
of $125,200, which it then trebled pursuant to the Tennessee Consumer Protection Act,
resulting in a total damage award of $375,600. The Trial Court also awarded Morgan
attorney fees of $4,460.00.

               On May 7, 2008, Discover retained new counsel. Soon thereafter, Discover
filed a motion to alter or amend the judgment pursuant to Tenn. R. Civ. P. 59.04. As grounds
for this motion, Discover alleged:

              1) [the final judgment] is based on the previous interlocutory
              Default Judgment entered against Discover, and the Court and
              the parties incorrectly evaluated Discover’s motion to set the
              Default Judgment aside under Rule 60.02 as if it were a final
              judgment, rather than under Rule 54.02 which applies to
              interlocutory orders which provides that the order was subject to
              revision at any time; 2) even if Rule 60.02 had applied (and
              Discover submits that it did not), Discover clearly satisfied Rule
              60.02’s more lenient standards applicable to setting aside default
              judgments, and the Court erred in analyzing Discover’s motion
              to set aside under the comparatively higher Rule 60.02 standards
              applicable to setting aside judgments after a trial; 3) Discover
              not only has meritorious defenses to Defendant/Counter-
              Plaintiffs claims, but her claims in fact fail to state a claim upon
              which relief can be granted; 4) Discover itself (as distinguished
              from its prior counsel) had no knowledge of the motion for
              default judgment, entry of the Default Judgment, or counsel’s
              efforts to set the Default Judgment aside until May 1, 2008,
              almost one year after the Default Judgment was entered and
              after the final hearing on Defendant/Counter-Plaintiff’s alleged
              damages; 5) Defendant/Counter-Plaintiff has admitted facts that
              almost certainly establish her liability on the account at issue,
              whether or not she is an account holder; and 6) the vast majority
              of Defendant/Counter-Plaintiff’s damages were based solely on
              an alleged reduction in her available credit - that is, reduction in
              the amount she could borrow which she would then owe to one
              or more creditors - but under the Court’s judgment, Discover
              must pay the amount by which her credit was reduced and she
              owes no one. (emphasis in the original)

                                              -6-
               Not surprisingly, Morgan opposed Discover’s motion. A hearing was held in
January 2009, following which the Trial Court entered an order denying Discover’s motion
to alter or amend the judgment. The Trial Court awarded Morgan an additional $2,000 in
attorney fees for having to defend the motion.

              Discover appeals raising the following issues, which we take verbatim from
its brief:

              Did the trial court err in denying Discover’s Rule 59.04 Motion
              to Alter or Amend Judgment given that:

              A.     The trial court incorrectly applied Rule 60, rather than
                     Rule 54, in evaluating Discover’s Motions to Set Aside
                     the court’s previous Order of “Default Judgment,” which
                     was not a final judgment because it adjudicated fewer
                     than all the claims of all the parties.

              B.     In the alternative, even if Rule 60 properly had applied to
                     Discover’s Motions to Set Aside the trial court’s Order
                     of “Default Judgment,” Discover satisfied Rule 60’s
                     excusable neglect standards for setting aside default
                     judgments.

              C.     In the alternative, even if Rule 60 properly had applied to
                     Discover’s Motions to Set Aside the trial court’s Order
                     of “Default Judgment” and Discover failed to satisfy
                     Rule 60’s excusable neglect standards, the $380,060 in
                     damages assessed against Discover was erroneous and
                     unsupported by competent evidence.

             Morgan asks this Court to affirm the judgment of the Trial Court in its entirety.
Morgan also requests an award of attorney fees incurred on appeal.

                                         Discussion

              We review a trial court’s ruling on a Tenn. R. Civ. P. 59.04 motion to alter or
amend a judgment using the abuse of discretion standard. See Stovall v. Clarke, 113 S.W.3d
715, 721 (Tenn. 2003); Linkous v. Lane, 276 S.W.3d 917, 924 (Tenn. Ct. App. 2008). As
noted by our Supreme Court:

                                             -7-
                An abuse of discretion is found only when a trial court has
                “‘applied an incorrect legal standard, or reached a decision
                which is against logic or reasoning that caused an injustice to the
                party complaining.’” State v. Stevens, 78 S.W.3d 817, 832
                (Tenn. 2002) (quoting State v. Shuck, 953 S.W.2d 662, 669
                (Tenn. 1997)). The abuse of discretion standard does not permit
                an appellate court to merely substitute its judgment for that of
                the trial court. See Eldridge v. Eldridge, 42 S.W.3d 82, 85
                (Tenn. 2001).

Henry v. Goins, 104 S.W.3d 475, 479 (Tenn. 2003). See also Eldridge v. Eldridge, 42
S.W.3d 82, 85 (Tenn. 2001) (“Under the abuse of discretion standard, a trial court’s ruling
‘will be upheld so long as reasonable minds can disagree as to propriety of the decision
made.’”)(quoting State v. Scott, 33 S.W.3d 746, 752 (Tenn. 2000)).3

              Discover’s first issue is its claim that the Trial Court erred when it applied the
standards applicable to Tenn. R. Civ. P. 60 motions, as opposed to the standards applicable
to Rule 54 motions, when evaluating Discover’s original motion to set aside entry of the
default judgment. Discover argues that because the default judgment as to liability was not
a final judgment pursuant to Rule 54.02 of the Tennessee Rules of Civil Procedure, that order
was subject to revision at any time and the Rule 60 requirements did not apply.4

               The problem with Discover’s position is that the motion as filed by Discover
states that it was being filed “pursuant to Rule 60.02 of the Tennessee Rules of Civil
Procedure” and that its attorney had committed “inadvertent error [that should be considered]
excusable pursuant to Rule 60.02 of the Tennessee Rules of Civil Procedure.” Discover later
amended its motion and the amended version still indicated that it was being filed “pursuant
to Rule 60 of the Tennessee Rules of Civil Procedure. . . .”

        3
          We likewise review a trial court’s ruling on a Tenn. R. Civ. P. 60.02 motion for relief from a final
judgment using the abuse of discretion standard. Henry v. Goins, 104 S.W.3d 475, 479 (Tenn. 2003). The
abuse of discretion standard also is applied under Rule 54.02. See Harris v. Chern 33 S.W.3d 741, 746
(Tenn. 2000) (“A trial court’s ruling on a motion to revise pursuant to Rule 54.02 will be overturned only
when the trial court has abused its discretion. See Donnelly v. Walter, 959 S.W.2d 166, 168 (Tenn. Ct. App.
1997).”).
        4
          Tenn. R. Civ. P. 55.02 provides that “[f]or good cause shown the court may set aside a judgment
by default in accordance with Rule 60.02.” In Patterson v. SunTrust Bank, No. E2009-01947-COA-R3-CV,
2010 WL 1741377 (Tenn. Ct. App. Apr. 30, 2010), we held that the term “default judgment” contained in
Rule 55.02 refers to a final judgment resolving all issues including liability and damages.

                                                     -8-
               In pertinent part, Tenn. R. App. P. 36(a) provides that “[n]othing in this rule
shall be construed as requiring relief be granted to a party responsible for an error or who
failed to take whatever action was reasonably available to prevent or nullify the harmful
effect of an error.” Discover explicitly stated several times to the Trial Court that the motion
and amended motion were being filed pursuant Tenn. R. Civ. P. 60.02. In addition, Discover
argued that it was entitled to relief pursuant to that particular Rule. When ruling on the
motion and amended motion, the Trial Court was addressing the specific issues raised by
Discover, i.e., whether the default judgment should be set aside pursuant to Rule 60.02.

                We decline to hold that the Trial Court erred by addressing the specific issues
raised by Discover in its motions. If the Trial Court should have analyzed the motion and
amended motion pursuant to Rule 54, then it was Discover who led the Trial Court astray.
In short, if any error was committed, Discover was the party responsible for that error. Tenn.
R. App. P. 36(a). We affirm the judgment of the Trial Court on this issue.

              Discover next argues that even if the Trial Court was correct when it relied on
Rule 60 to resolve its motion to set aside the default judgment, it nevertheless erred when it
concluded that Discover was not entitled to relief pursuant to that Rule. In support of this
position, Discover argues, among other things, that its action were not willful and that
Richardson’s calendaring error constituted excusable neglect. Discover had the burden of
showing it was entitled to relief pursuant to Rule 60. See Holly v. Holly, No.
M2007-02130-COA-R3-CV, 2008 WL 2695656, at *3 (Tenn. Ct. App. July 9, 2008), no
appl. perm. appeal filed ([T]he party seeking Rule 60 relief [has] the burden of proving that
such relief was warranted . . . .”). Discover correctly argues that “[m]otions to set aside
default judgments are not viewed with the same strictness that motions to set aside judgments
after a hearing on the merits are viewed. Rather, such motions are construed liberally in
favor of granting the relief requested.” Clark Power Services, Inc. v. Mitchell, No.
E2007-01489-COA-R3-CV, 2008 WL 2200047. at *2 (Tenn. Ct. App. May 27, 2008), no
appl. perm. appeal filed.

               The record on appeal contains only an unsupported and unsworn allegation in
a motion that the reason Richardson did not show up for the May 22, 2007, hearing on the
motion for default judgment was because he “documented the wrong hearing date on his
calendar.” However, Richardson has never filed an affidavit to support this assertion. In
addition, while the alleged calendering error may offer some excuse for Richardson not
attending the default hearing, it offers no explanation as to why an answer was not filed until
almost one year late. In short, Discover has offered no affirmative evidence to support its
allegation that the failure to timely file the answer constituted excusable neglect and was not

                                              -9-
willful.5 See Pryor v. Rivergate Meadows Apartment Associates Limited Partnership, No.
M2008–02586-COA-R3-CV, 2009 WL 1181343 (Tenn. Ct. App. May 1, 2009), app. denied
Nov. 23, 2009, (“To meet [the burden under Rule 60], the movant must ‘set forth in a motion
or petition and supporting affidavits facts explaining why the movant was justified in failing
to avoid the mistake, inadvertence, surprise or neglect.’” Id. at *3 (quoting Tennessee State
Bank v. Lay, 609 S.W.2d 525, 527 (Tenn. Ct. App. 1980)) (emphasis added). Accordingly,
we do not conclude that the Trial Court’s refusal to set aside the default judgment pursuant
to Rule 60.02 constituted an abuse of discretion.

                Discover’s final issue is its claim that the Trial Court erred in the amount of
damages awarded to Morgan. Morgan testified at the hearing on damages. Morgan stated
that her husband passed away on August 27, 2004. According to Morgan, she was not a joint
account holder on the Discover card. Morgan testified that for a while, she continued to
make payments on the Discover card after her husband passed away. She made a total of
$1,200 in payments which more than covered the cost of the airline ticket she purchased on
the card after her husband’s death. After she stopped making payments, she started receiving
collection letters and collection calls. The delinquency was reported on Morgan’s credit
report beginning in February of 2005. As of the date of the hearing, it was still on her credit
report as a delinquency.

             Prior to her husband passing away, Morgan had two credit cards, one with Citi
Bank and another with Chase. On May 5, 2005, Morgan’s available credit on these two cards
was $123,400. As of the date of the hearing, Morgan had $5,500 in available credit. In
February of 2005, her credit accounts started being cancelled and her interest rates began to
increase. The interest on one of her cards increased from 14% to 29.99%. Prior to February
of 2005, Morgan had never applied for a credit card and been denied. After February of
2005, she applied for and was denied a Sears credit card.

              After the delinquency appeared on her credit report, Morgan unsuccessfully
attempted to refinance her home. Although she could not obtain refinancing, she was able
to obtain a home equity line of credit. The interest rate on the line of credit was higher than
what she would have received had she been able to refinance. Other than the negative effects
surrounding the Discover card, Morgan had no other negative information on her credit
report.

        5
          At the hearing on damages, attorney Steven Richardson informed the Trial Court that he had
prepared and filed an affidavit discussing the events surrounding the late filing of the answer. If such an
affidavit was filed, it is not in the record on appeal.

                                                   -10-
              Following the hearing, the Trial Court awarded Morgan a judgment from the
bench, stating as follows:

                     The Court has considered the testimony, proof,
               statements and arguments of counsel on the issue of damages.

                      Three causes of action are alleged. Violation of the
               Federal Credit Reporting Act, Tennessee Consumer Protection
               Act, [and libel.]

                      What’s been shown to the Court here today is direct costs
               of additional credit expenses through higher interest rate and
               financing through a Home Equity Line of Credit at a higher rate
               and the loss of credit.

                       The reduction in the available credit as specified, a
               significant reduction. $117,900.00; $6800.00 in higher Home
               Equity Costs; additional $500.00 in higher interest rates on
               cards, total $125,200.00. . . .

The Trial Court then trebled the damages under the Consumer Protection Act, resulting in
a total award of $375,600 in compensatory damages. The Trial Court also awarded
$4,460.00 in attorney fees.6

               “The party seeking damages has the burden of proving them.” BancorpSouth
Bank, Inc. v. Hatchel, 223 S.W.3d 223, 229 (Tenn. Ct. App. 2006)(quoting Overstreet v.
Shoney's, Inc., 4 S.W.3d 694, 703 (Tenn. Ct. App. 1999)). Courts should not award damages
based on mere conjecture or speculation or when “the evidence presented by the plaintiff is
insufficient to enable the trier of fact to make a fair and reasonable assessment of damages.”
Id. at 229-230. While the law does not require exactness in the computation of damages,
proof of damages must be “sufficiently certain to enable the trier of fact, using its discretion,
to make a fair and reasonable assessment of damages.” Id. at 230.

             We agree with Discover that it was neither fair nor reasonable for the Trial
Court to award Morgan compensatory damages based on a dollar for dollar amount of the
decrease in her available credit. In other words, even though Morgan’s available credit
decreased by $117,900.00, it was error to award her compensatory damages equal to that

       6
         As stated previously, following denial of the Rule 59.04 motion to alter or amend the final
judgment, the Trial Court awarded an additional $2,000 in attorney fees.

                                               -11-
amount. While a decrease in her available credit is something for which Morgan is entitled
to reasonable compensation, awarding as damages an amount equal to the decrease in
available credit is an inappropriate way in which to measure such a loss because a one dollar
decrease in available credit is not proof of one dollar of actual damages. Since the decrease
of available credit comprised the vast majority of the judgment awarded to Morgan, we
vacate the entire amount of the judgment, and we remand this case to the Trial Court for a
new hearing on the amount of damages sustained by Morgan.

               In summary, we affirm the judgment of the Trial Court which denied
Discover’s Rule 59.04 motion to alter or amend the judgment and set aside the default
judgment. However, the award of damages is vacated, and this case is remanded for a new
hearing to determine the amount of Morgan’s damages. Because we are affirming the default
judgment against Discover as to liability pursuant to the Tennessee Consumer Protection Act,
we think it is appropriate to award Morgan her attorney fees incurred on appeal.
Accordingly, this case is remanded both for a new hearing on a fair and reasonable
assessment of the amount of Morgan’s damages, as well as a determination of the reasonable
attorney fees incurred by Morgan on this appeal.

                                        Conclusion

              The judgment of the Circuit Court for Sevier County is affirmed in part and
vacated in part, and this cause is remanded to the Circuit Court for Sevier County for further
proceedings consistent with this Opinion and for collection of the costs below. Exercising
our discretion, costs on appeal are taxed to the Appellant, Discover Bank, and its surety.

                                                    ________________________________
                                                    D. MICHAEL SWINEY, JUDGE

                                             -12-