Tennessee State Bank v. Lay

• Decision Date: 12 September 1980
• Citation: 609 S.W.2d 525
• Parties: TENNESSEE STATE BANK, Plaintiff-Appellee, v. Amy Lucille Reagan LAY, Defendant-Appellant.
• Court: Tennessee Court of Appeals

Page 525

609 S.W.2d 525

TENNESSEE STATE BANK, Plaintiff-Appellee, v. Amy Lucille Reagan LAY, Defendant-Appellant.

Court of Appeals of Tennessee, Eastern Section.

Sept. 12, 1980.

Permission to Appeal Denied by Supreme Court Dec. 1, 1980.

Gary R. Wade, Sevierville, for plaintiff-appellee.

Jerry K. Galyon and Dwight E. Stokes, Sevierville, for defendant-appellant.

OPINION

FRANKS, Judge.

Defendant has appealed the trial court's overruling her T.R.C.P., Rule 60 motion to set aside a default judgment.

In 1977, defendant, then a resident of Sevier County, purchased an automobile executing a retail installment sales contract providing for 36 monthly payments. The contract provided credit accident health insurance and was assigned to plaintiff bank. Defendant began making the monthly payments pursuant to the contract but, in September, 1977, she became disabled as a result of injuries and moved to Oregon to live with her daughter. Pursuant to medical advice, she filed a claim on her disability insurance policy for payments on the installment contract during her disability. In January, 1978, she received by mail a copy of the retail installment sales contract, stamped "paid" by plaintiff, with title to the automobile attached.

This suit was filed on March 3, 1978, alleging defendant was in default on the sales contract. Process was issued under the Long Arm Statute through the Secretary of State, which was returned indicating the return receipt was signed "Amy Lay" with the delivery date in Oregon of March 16, 1978. In April or early May of 1978, plaintiff's agent took possession of defendant's automobile in the State of Oregon; defendant then contacted a legal aid attorney in Oregon to investigate the circumstances surrounding the repossession of the vehicle. Plaintiff's complaint was not answered and a default judgment was entered against the defendant in the amount of $4,546.42 on June 22, 1978.

Defendant returned temporarily to Sevier County in July of 1978 and states she contacted an officer of the bank but was not informed that a judgment had been entered against her and was told by the bank officer that the bank did not receive the October 1977 payment, or any subsequent payments, and that the bank had held funds deposited by her for the payment of the contractual obligation.

On returning to Oregon, she engaged the services of an attorney who contacted the Clerk and Master of Sevier County who informed, by letter dated August 10, 1978, that a default judgment had been entered against defendant with an execution levied upon defendant's certificate of deposit in the Bank of Sevierville. Sevier County counsel was then retained to represent defendant and, on January 2, 1979, defendant filed a motion pursuant to Rule 60 to set aside the default judgment. On March 9, 1979, the motion was overruled "without precluding supplemental motions on the part of the Defendant" and, on March 19, 1979, defendant's counsel filed a "petition" to set aside the default judgment pursuant to Rule 60.02(1), alleging in detail the facts and circumstances defendant contends entitled her to have the default judgment set aside, to the effect that she was not served with a copy of the summons and complaint in the case and received no notice of the suit until after judgment was obtained, and that she had a valid defense to the action.

An answer was filed to the petition and various affidavits and countervailing affidavits were filed. On November 28, 1979, the trial court entered an order denying defendant's petition to set aside the default judgment.

Defendant contends the chancellor applied an erroneous standard of proof for relief under Rule 60.02, T.R.C.P. An excerpt from the chancellor's bench comment incorporated in the judgment, demonstrates the standard applied by the trial court:

Judgments of Courts of record are not to be lightly changed, altered, amended or set aside, but only done upon very clear, convincing, cogent evidence that a true injustice has been done to the complaining party and that the complaining party is in no wise responsible, or termed in another way, negligent in protecting that party's interest.

Rule 60.02 permits the court to relieve a party or his legal representative from a final judgment, order or proceeding due to a mistake, inadvertence, surprise or excusable neglect. The burden is upon the movant to set forth in a motion or petition and supporting affidavits facts explaining why the...