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State Farm Mutual Automobile Insurance Co. v. Jones

Court of Appeals of Tennessee, Nashville

August 11, 2017

STATE FARM MUTUAL AUTOMOBILE INSURANCE COMPANY
v.
JAMES T. JONES, ET AL.

          Assigned on Briefs July 3, 2017

         Direct Appeal from the Circuit Court for Hickman County No. 14-CV-34 Deanna B. Johnson, Judge

         The trial court dismissed plaintiff's claim for failure to prosecute and for failing to respond to affirmative defenses. The trial court also denied plaintiff's motion to alter or amend the judgment. Because disposition of litigation on the merits is favored over procedural dismissals, we reverse.

         Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court Reversed and Remanded

          Jennie V. Smith-Howard, Cleveland, Ohio, for the appellant, State Farm Mutual Automobile Insurance Company.

          No briefs were filed on behalf of James T. Jones and Ronald J. Jones.

          Brandon O. Gibson, J., delivered the opinion of the court, in which Richard H. Dinkins, and Thomas R. Frierson, II, JJ., joined.

          OPINION

          BRANDON O. GIBSON, JUDGE

         I. Background

         Appellant State Farm Mutual Automobile Insurance Co., as subrogee of a party injured in an automobile accident, filed suit on May 22, 2014, against James Jones and his father, Ronald Jones ("Defendants"). Over a year later, on August 31, 2015, because Defendants did not file an Answer, State Farm filed a Motion for Default Judgment and set its motion to be heard on September 10, 2015. One day before the hearing on the Motion for Default Judgment, Defendants filed their Answer, and State Farm struck the motion for default.

         After striking the motion for default, the law firm handling State Farm's files separated into two entities. Litigation regarding the law firm separation caused a major delay in the handling of this case, and no discovery or motions were served or filed for approximately one year. State Farm's attorney started drafting discovery requests in August 2016 and served them on September 19 and 20, 2016. Before the discovery requests were sent, however, Defendants filed a Motion to Dismiss for failure to prosecute on September 15, 2016.[1] State Farm received the Defendants' motion on September 20, 2016, and filed a Notice of Service of their discovery requests thereafter. On September 22, 2016, State Farm filed a response to Defendants' Motion to Dismiss asserting the facts set forth above.

         The trial court heard Defendants' Motion to Dismiss on September 28, 2016. On October 19, 2016, the trial court signed an order granting Defendants' Motion to Dismiss.[2] It found that State Farm "took no action in their lawsuit for the three hundred and seventy (370) days that elapsed between the filing of Defendants['] Answer and the filing of Defendants['] Motion to Dismiss" and "Plaintiff, having made no response or argument in opposition to Defendants['] affirmative defenses, has thereby admitted them." Based on those findings, the trial court dismissed the case with prejudice and awarded Defendants attorney's fees totaling $2, 740.

         On October 17, 2016, State Farm filed a "Motion to Set Aside Dismissal, or in the Alternative, Motion to Alter or Amend Judgment Pursuant to Tennessee Rule of Civil Procedure Rules 60.02 and 59 and Motion to Strike Award of Attorney's Fees, " including an affidavit from the attorney handling the case testifying to the work she did and an exhibit entitled "Rathbone Group History Report, " which detailed when work had been done on the case. The trial court denied State Farm's motion, and it timely appealed.

         II. Issues

         State Farm raises the following issues, as restated, on appeal:

1. Whether the trial court erred in granting Defendants' ...

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