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Abolins v. Santas

Court of Appeals of Tennessee, Nashville

October 3, 2017


          August 24, 2017 Session

         Appeal from the Chancery Court for Davidson County No. 15-1315-II William E. Young, Chancellor

         This appeal concerns an order to set aside a default judgment. Kristina Abolins and Christopher Heath Hawkins ("Plaintiffs") sued Frank Santas ("Santas"), doing business as Gunner Inc., and Alta Horizon, Inc. ("Defendants, " collectively), asserting a number of causes of action arising out of Defendants' work on a renovation project at Plaintiffs' home. After several months with no responsive filing from Defendants, Plaintiffs moved for default judgment. The Chancery Court for Davidson County ("the Trial Court") granted Plaintiffs' motion for default judgment. Defendants filed a motion to set aside default judgment, raising certain defenses and taking issue with service of process. The Trial Court entered an order granting the motion to set aside on the condition that Defendants pay Plaintiffs' attorney's fees and expenses. Defendants did not pay, and instead appealed to this Court. We find no abuse of discretion by the Trial Court. We, therefore, affirm the judgment of the Trial Court.

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

          Charles J. Friddell, Nashville, Tennessee, for the appellants, Frank Santas and Alta Horizon, Inc.

          Jennifer S. Ghanem, Nashville, Tennessee, for the appellees, Kristina Abolins and Christopher Heath Hawkins.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Thomas R. Frierson, II, J., joined, and W. Neal McBrayer, J., filed a separate concurring and dissenting opinion.




         In November 2015, Plaintiffs sued Defendants in the Trial Court seeking damages arising from an alleged breach of contract, conversion, violation of the Tennessee Consumer Protection Act ("TCPA"), and other causes of action. Plaintiffs alleged they had hired Defendants to perform a home renovation project which, according to Plaintiffs, never was completed satisfactorily by Defendants.

         Plaintiffs attempted to serve Santas individually and as managing agent of Alta Horizon by means of the Dickson County Sheriff's Office. Process was returned with the notation "avoiding service" entered. Plaintiffs then hired private process servers to serve Defendants. According to affidavits by process servers Harold Loux and Kevin Trick, Defendants were served on February 23, 2016. The summons return was late-filed in December 2016.

         On March 31, 2016, Plaintiffs' counsel, Jennifer Ghanem ("Ghanem"), spoke with Defendants' counsel, Charles Friddell ("Friddell"), concerning the case. Ghanem emailed Friddell a copy of Plaintiffs' complaint. On April 1, 2016, Friddell sent a letter to Ghanem in which he stated that he was not authorized to accept service on behalf of Defendants. On April 19, 2016, Friddell informed Ghanem by email that he would file a motion to dismiss. However, no motion to dismiss was filed at this stage. Friddell did not file an appearance on behalf of Defendants until the filing of Defendants' motion to set aside default judgment.

         On May 31, 2016, Plaintiffs filed a motion for default judgment. By July 2016 order, the Trial Court granted default judgment in favor of Plaintiffs for a total of $166, 840.98, which included a trebling under the TCPA of $55, 613.66 in compensatory damages. The Trial Court stated in this order regarding the service of process that: "Defendants did not respond to process or participate in the litigation, and a Motion for Entry of Default was filed by the Plaintiffs, to which no response was filed as required by Rule 55.01 of the Tenn. R. Civ. Pro."

         In October 2016, Defendants filed their motion to set aside default judgment pursuant to Tenn. R. Civ. P. 55.02 and 60.02. Defendants also filed a motion to dismiss. In their memorandum in support of their motion to set aside default judgment, Defendants asserted the following with respect to what they alleged was lack of notice and improper service of process:

The Defendants Motion under Rule 60.02 (1) for mistake, inadvertence, surprise or excusable neglect would show unto the Court the Sworn Affidavit of Frank Santas, the Declaration of Counsel, Charles J. Friddell and the record as reflected in the case file.
The Affidavit of Frank Santas clearly shows that he was served with two papers on February 9th, 2016 which are the two Summons as prepared and issued by this Court. However, the Affidavit clearly states that no Complaint was attached to either of the Summons as required by the law to effectively serve a Defendant in this cause. The Affidavit further shows that he brought the two Summons to Charles J. Friddell who he directed to write a letter informing the Plaintiffs counsel that the Service of Process was improperly handled. The Declaration of Counsel as submitted by Charles J. Friddell clearly shows that a letter was directed to Plaintiffs counsel outlining the objection to the Service of Process by the private process service.
Further, the Statement of Counsel clearly show e-mail correspondence with Plaintiff's counsel outlining the irregularities and the fact that Gunner, Inc. while previously Administratively Dissolved in August of 2015 was reinstated on January 26, 2016 and that Charles J. Friddell and agreed to accept Service of Process for Gunner, Inc. from Plaintiff's counsel. Curiously, there is nothing in the Court record with respect to any representation or notices of the Motion for Default, the Notice of Default Hearing, or the Order as granted in this case.
Further, the Declaration of Counsel as submitted by Charles J. Friddell shows that he has received no correspondence other than the letter and e-mails Ms. Ghanem, Plaintiff's counsel [sic]. Neither the Motion nor the Notice of Hearing nor the proposed Final Order was submitted to or sent as a courtesy to Charles J. Friddell, Attorney.
The Affidavit of Frank Santas also states that due to his turning the Summons over to Mr. Friddell, his attorney, that he felt this matter was being handled by Mr. Friddell and did not receive the correspondence or mail sent from the Plaintiff's counsel's office.
On October 21st, 2016 Frank Santas received from the Chancery Court Clerk and Master's Office a Bill of Cost and immediately called Charles Friddell to find out what the status of this case was. On October 23rd, 2016 Charles J. Friddell obtained copies of the Pleadings filed in this case after April, 2016 and was advised for the first time that a Judgment, including damages assessed of $55, 613.66 had since been entered along with a Judgment for treble damages of $166, 840.98.
Defendants further would show to the Court, pursuant to Rule 60.02(3) that the entry of a Judgment is void as contrary to the laws of the State of Tennessee. Plaintiffs did not properly serve the Defendants as required by Rule 4.04(1) and Rule 4.04(4) of the Tennessee Rules of Civil Procedure. Plaintiffs did not serve a copy of the Complaint along with the two summons.

         The Trial Court conducted a hearing on the two motions in November 2016. The Trial Court ruled that it would grant Defendants' motion to set aside default judgment on the condition that Defendants pay Plaintiffs' attorney's fees and costs. Defendants filed a motion to alter or amend judgment, in which they articulated their position in part as follows:

Defendants have incurred substantial attorney fees and costs in their Motion to Set Aside, appearance and review of other matters. Defendants have shown the Court by other averments that substantially the amount of fees and delays in this matter could have been minimized had Plaintiffs counsel followed the rules and given notice to Mr. Friddell that she was filing for a Default Judgment in this matter. Defendants maintain that the imposition of fees as a sanction in this regard is inequitable.
The Defendants have by sworn affidavit stated that they did not receive the Motion for Default Judgment nor the Order of Default. Plaintiffs' counsel relies on the Certificate of Service contained in those documents as filed.
The Certificate of Service by Jennifer S. Ghanem to Alta Horizon, Inc. was improperly addressed. The zip code for Bon Aqua, Tennessee is 37025. The Plaintiffs counsel mailed the letter for Alta Horizon, Inc. to 37205 which is the zip code for Belle Meade. This clearly rebuts the presumption that the Certificate of Service to Alta Horizon, Inc. is presumed to be served. It further may explain why the Defendants did not receive such notice.
The certificate of service required by Tenn. R. Civ. P. 5.03 is prima facia evidence that the document was served in the manner described in the certificate and raises a rebuttable presumption that it was received by the person to whom it was sent. The defendants contend that the failure of Plaintiffs counsel to properly and timely file documents with the Court impeaches the certificates as signed and rebuts the presumption. The defendants further contend that the failure of ...

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