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Wise v. Bercu

Court of Appeals of Tennessee, Nashville

September 30, 2019

COLETTE ELAINE WISE
v.
DANIEL GREGORY BERCU

          Session: June 4, 2019

          Appeal from the Chancery Court for Williamson County No. 45413 Deanna Bell Johnson, Judge

         This appeal arose from the parties' divorce proceedings. After the husband failed to appear at a motion hearing wherein the wife was seeking to compel discovery and requesting sanctions against the husband, the Trial Court granted a default judgment against the husband. Although requesting sanctions to include default judgment if the husband failed to comply with discovery, the wife had not specifically requested immediate entry of default judgment against him. The Trial Court thereafter scheduled a final trial for the divorce. The husband filed nothing with the Trial Court to attempt to remedy the default judgment against him prior to trial. The husband was provided notice of the trial but failed to appear. On the day of the trial, the Trial Court heard the evidence presented by the wife regarding the grounds for divorce, marital assets, marital debts, property division, and alimony. Based on the wife's uncontested testimony and evidence presented at trial, the Trial Court granted a divorce, divided the marital estate, and awarded wife alimony in futuro and alimony in solido. Subsequently, the husband filed two motions pursuant to Tennessee Rule of Civil Procedure 60.02, both of which were denied by the Trial Court. The husband appealed. Upon a review of the record before us, we determine no reversible error exists in this matter. We, therefore, affirm the Trial Court's judgment in all respects.

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

          Sarah Richter Perky, Franklin, Tennessee, for the appellant, Daniel Gregory Bercu.

          Thomas F. Bloom, Nashville, Tennessee, for the appellee, Colette Elaine Wise.

          D. Michael Swiney, C.J., delivered the opinion of the court, in which Frank G. Clement, Jr., P.J., M.S., and Richard H. Dinkins, J., joined.

          OPINION

          D. MICHAEL SWINEY, CHIEF JUDGE

         Background

         Colette Elaine Wise ("Wife") and Daniel Gregory Bercu ("Husband") were married in March 2005. It was Wife's first marriage and Husband's second. No children were born of the marriage. Husband is an independent contractor emergency room physician earning approximately $38, 123 per month. During the marriage, Wife worked in the non-profit sector. At the time of trial, Wife was disabled and unable to maintain employment.

         In July 2016, Wife filed a complaint for divorce in the Williamson County Chancery Court ("Trial Court"), alleging grounds of irreconcilable differences or, alternatively, inappropriate marital conduct and adultery. Husband filed an answer to Wife's complaint and a counterclaim, which alleged grounds of irreconcilable differences or inappropriate marital conduct. Discovery thereafter commenced.

         In November 2016, Wife filed a motion to compel discovery responses alleging that despite Wife's counsel sending a letter in September to Husband's counsel about the overdue responses and Husband's counsel responding that Husband would comply as soon as possible, discovery responses still had not been provided. Wife's counsel also sent another letter in October about the overdue responses. In the letter, Wife's counsel referred to an Agreed Order entered by the Trial Court on October 6, 2016, which stated, as pertinent, that the parties had agreed to provide to the opposing party within thirty days an accounting of transfers and withdrawals from all bank accounts in joint or separate names for the time period from January 1, 2016, through September 1, 2016, and also to provide an accounting of all income and expenses for each month beginning September 1, 2016, by the 15th day of the following month. The Trial Court held a hearing on Wife's motion to compel and entered its order on December 2, 2016, granting Wife's motion to compel and ordering Husband to provide discovery responses within ten days. The Trial Court also awarded Wife $100 toward her attorney's fees. Thereafter, Husband responded to Wife's discovery requests but did not comply with the Trial Court's order requiring an accounting of his finances.

         On December 19, 2016, Husband's counsel filed a motion to withdraw requesting to be relieved immediately as counsel. The motion asserted, in part, that Husband had notified counsel that he no longer wished for her to represent him "effective right away." The motion also stated that the only outstanding matter was that Husband needed to file his monthly accounting of all expenses for each month since January 2016, which counsel had advised Husband about and which were late. Husband's counsel filed an amended motion to withdraw on January 5, 2017, requesting an attorney's fee lien against the marital estate. Husband's counsel filed an affidavit stating that she had spent over 65 hours working on the case including spending 51.2 hours drafting and preparing Husband's discovery responses. The Trial Court entered an order on January 25, 2017, allowing Husband's counsel to withdraw effective immediately and granting the attorney a lien against the marital estate. In that order, the Trial Court stated "that there will be no prejudice to the Husband given the current posture of the case." Also on January 25, 2017, Husband filed a pro se letter to the Trial Court advising that he no longer was represented by counsel and requesting forty-five days to retain a new attorney. Husband did not schedule a hearing before the Trial Court regarding approval of his request.

         On February 3, 2017, Wife filed a motion to compel and for sanctions pursuant to Tennessee Rule of Civil Procedure 37.02. Wife alleged that Husband had failed to provide the agreed upon financial accounting for January 2016 through December 2016 and had failed to fully and completely respond to discovery. In her motion, Wife requested that the Trial Court enter an order compelling Husband to comply with discovery within ten days or face sanctions including entry of default judgment against him. On February 22, 2017, Wife appeared at the hearing for her motion to compel and for sanctions. Husband was provided notice of the motion hearing, but neither Husband nor counsel on his behalf appeared. The Trial Court entered a default judgment against Husband on March 3, 2017, for failure to comply with court orders regarding discovery and the required accounting of Husband's income and spending. The Trial Court further granted Wife an award of attorney's fees in the amount of $5, 405. The court order scheduled a final hearing for March 28, 2017. Husband was included on the certificate of service to that order.

         Neither Husband nor any counsel on his behalf appeared at the trial on March 28, 2017. The Trial Court conducted a trial, receiving evidence regarding grounds for divorce, the distribution of marital property, and alimony. Upon consideration of the evidence presented by Wife, the Trial Court entered its Final Decree of Divorce, which granted Wife a divorce on the grounds of adultery and inappropriate marital conduct by Husband, distributed the parties' marital assets and debts, and granted Wife awards of alimony in solido and alimony in futuro.

         In April 2017, Husband filed a motion to alter or amend and for relief pursuant to Tennessee Rule of Civil Procedure 60.02(1) and (5).[1] The Trial Court denied Husband's motion after finding that Husband's conduct was willful and that he had failed to establish excusable neglect. On June 21, 2017, Husband's new counsel entered a notice of appearance. That same day, Husband filed with the Trial Court his discovery responses and the communications between Husband and counsel with regard to discovery and the withdrawal of Husband's original counsel.

         Husband then appealed to this Court and filed a designation of the record, which included the items he filed on June 21, 2017. After the record was transmitted to this Court, Wife filed a motion to strike from the appellate record Husband's discovery responses and the communications between counsel. This Court remanded to the Trial Court for consideration of Wife's motion to strike, which was subsequently granted by the Trial Court.

         Husband thereafter filed a motion to remand this matter to the Trial Court for the filing and adjudication of a Rule 60.02(2) motion. This Court remanded to the Trial Court for consideration of Husband's motion. A hearing was scheduled for this motion, but the Trial Court informed the parties that a hearing was unnecessary and subsequently entered its ruling without a hearing. The Trial Court dismissed Husband's Rule 60.02(2) motion, determining that Husband had not provided sufficient specificity in his motion to support relief pursuant to Rule 60.02(2).

         Discussion

         Although not stated exactly as such, Husband raises the following issues for review on appeal: (1) whether the Trial Court erred by entering a default judgment against Husband, (2) whether the Trial Court erred by denying Husband's Rule 60.02 motions to set aside the default judgment, (3) whether the Trial Court erred in its valuation of the marital property and its distribution of the marital estate, (4) whether the Trial Court erred in its award to Wife of alimony, (5) whether the Trial Court erred by awarding Wife her reasonable attorney's fees, and (6) whether Husband is entitled to an award of attorney's fees incurred during the appeal. Wife raises one additional issue for appeal, which we restate slightly: whether Wife is entitled to an award of her reasonable attorney's fees incurred on appeal.

         Our review is de novo upon the record, accompanied by a presumption of correctness of the findings of fact of the trial court, unless the preponderance of the evidence is otherwise. Tenn. R. App. P. 13(d); Kelly v. Kelly, 445 S.W.3d 685, 692 (Tenn. 2014). A trial court's conclusions of law are subject to a de novo review with no presumption of correctness. Kelly, 445 S.W.3d at 692.

         We first address Husband's issue regarding whether the Trial Court properly granted default judgment against Husband. The parties filed an agreed order, entered by the Trial Court in October 2016, which required both parties to provide to the other party an accounting of all bank accounts both jointly and separately owned. Pursuant to this order, the parties were required to provide an accounting of all money spent from January 1, 2016, through September 1, 2016, to the other party within thirty days of the order. Also, the order required the parties to provide an accounting of all income and expenses for all subsequent months that would be due on the 15th day of the following month.

         In November 2016, Wife filed her first motion to compel discovery. Following a hearing, the Trial Court granted Wife's motion and required Husband to comply with discovery within ten days of the order. Subsequently, Husband provided some discovery responses to Wife but had not provided the court-ordered accounting of his financial transactions.

         Husband filed a letter with the Trial Court on January 25, 2017, informing the Trial Court that he was no longer represented by an attorney and requesting an additional forty-five days to retain counsel. In this letter, Husband included contact information for the attorney he planned to retain. During oral argument before this Court, Husband's attorney stated that Husband was not present for the motion to compel hearing due to his belief that he had forty-five days to retain counsel. Although Husband's letter to the Trial Court was filed on January 25, 2017, Husband's attorney had filed a motion to withdraw on December 19, 2016, informing the Trial Court that Husband no longer wished for her to represent him in the matter. Following his letter, Husband did not inquire with the Trial Court whether the Trial Court had granted him additional time to retain counsel and, instead, failed to appear at subsequent hearings for which he was provided notice.

         On February 3, 2017, Wife filed her second motion to compel discovery and a request for Rule 37.02 sanctions against Husband. According to Wife's motion, Husband had maintained separate credit and bank accounts from Wife, had provided "seriously deficient" discovery responses, had not provided an accounting for his bank accounts regarding his income and spending as ordered, and had been "very secretive" about his finances. Wife's motion began as follows:

Comes now [Wife] and respectfully seeks an Order compelling Husband to immediately comply with the Court's prior Order entered on October 6, 2016, and provide a financial accounting of his income and expenses, and for Rule 37 sanctions against [Husband] for failing to comply with discovery orders . . . .

(Emphasis added.) In her motion, Wife provides a list of a trial court's options regarding sanctions pursuant to Tennessee Rule of Civil Procedure 37.02. Wife proceeded as follows:

It is well-established that a default judgment is appropriate where there is a clear record of delay or contumacious conduct. Murray v. Christian Methodist Episcopal Church, 153 S.W.3d 371 (Tenn. Ct. App. 2004). [Husband] has a clear pattern of discovery abuse, stonewalling, and unreasonable delay.

         Wife then requested the Trial Court to enter an order compelling Husband to comply with discovery orders within ten days "or face sanctions including the Court entering a default judgment against Husband . . . ." A hearing was held subsequently, at which Husband failed to appear. Husband still had not complied with discovery orders by that time. As such, the Trial Court granted Wife's motion for sanctions by entering a default judgment against Husband, determining that Husband was "not cooperating with discovery orders and disobeying the Court's prior orders on financial accounting."

         Husband contends that the Trial Court erred by granting default judgment against him. According to Husband, Wife did not properly request a grant of default judgment in her motion to compel discovery and for sanctions. However, we find that argument to be without merit. The first line of Wife's motion requested sanctions against Husband pursuant to Tennessee Rule of Civil Procedure 37.02 for failure to comply with discovery orders. Wife also described the sanctions available to the Trial Court, which included entry of default judgment. Wife then requested the Trial Court to compel Husband to comply with discovery within ten days or to face sanctions. We determine this motion to be sufficient to put Husband on notice that Wife was requesting sanctions against him in the form of a default judgment should he not comply with discovery requests or the Trial Court's order requiring he provide Wife with a financial accounting. Had Husband appeared at this hearing, he could have responded to Wife's motion. He, however, did not do so.

         After the entry of default judgment against Husband, the Trial Court scheduled a subsequent final hearing on March 28, 2017. Husband was included on the certificate of service of this order demonstrating that a copy of this order was mailed to him by U.S. mail on February 23, 2017. The Trial Court's March 2017 divorce decree was based on evidentiary support and was not merely a default judgment. See Tenn. Code Ann. § 36-4-114 (2017) (requiring a trial court to hear proof of the facts alleged regarding the statutory grounds for divorce in all cases except a divorce on the ground of irreconcilable differences). During the March 28, 2017 hearing, the Trial Court heard evidence and considered exhibits presented by Wife regarding grounds for divorce, distribution of marital property and debts, and alimony. Although Husband may have been precluded from presenting contradictory evidence during this trial because of the default judgment against him, see Marshall v. Marshall, No. M2009-02463-COA-R3-CV, 2010 WL 4670982, at *4 (Tenn. Ct. App. Nov. 16, 2010), Husband could have made an effort to remedy the entry of a default judgment against him prior to trial. Husband had the ability to appear in court both at the February 2017 hearing and for trial in March 2017 or to file pleadings in an attempt to prevent or remedy the default judgment. Instead, Husband chose to do nothing until after the Trial Court had entered its final divorce decree. Husband provided no justifiable explanation for his failure to comply with discovery or to appear at either the trial or the motion to compel and sanctions hearing.

         Husband argues that the Trial Court erred by failing to stay the proceedings to allow Husband time to hire an attorney. However, the record reflects that Husband had sufficient time to hire an attorney. Husband's attorney had filed her initial motion to withdraw on December 19, 2016, and had stated that she was withdrawing immediately because Husband had informed her that he no longer wanted her to represent him in this matter. The hearing on the motion to compel and for sanctions did not occur until February 22, 2017. Husband had over two months to hire new counsel to represent him. As such, we find the Trial Court did not err in this regard.

         Additionally, Husband avers that "the trial court erred in entering a default judgment against him when the default judgment was the first discovery sanction entered in the case, he made a good faith effort to respond to discovery and the discovery shortcomings were not willful or contumacious, [Wife] suffered no measurable prejudice and [Husband] was unrepresented and financially unable to retain counsel when the default was entered." Wife's first motion to compel was in December 2016, and the Trial Court gave Husband ten days to respond to discovery following the hearing on that motion. Although Husband provided some discovery responses, he had not complied with the court-ordered requirement of providing his financial accounting. Wife filed her second motion to compel and a request for sanctions in February 2017. Husband did not appear for the motion hearing to contest the allegations made in Wife's motion to compel and for sanctions. The fact that Wife only filed one motion requesting sanctions does not preclude the Trial Court from entering a default judgment. Furthermore, we disagree, as did the Trial Court, that Husband had acted in good faith. Husband provided some discovery responses but had never provided the court-ordered financial accounting for any month required, despite his agreement to do so. The Trial Court concluded that Husband's actions were willful, and we agree. We find that Husband's argument in this regard is without merit. We therefore find that the Trial Court did not abuse its discretion by granting the default judgment against Husband. Consequently, we find Husband's argument that the Trial Court committed reversible error by granting a default judgment to be without merit.

         We next address Husband's issues regarding whether the Trial Court erred by declining to set aside the divorce decree pursuant to Tennessee Rule of Civil Procedure 60.02. In pertinent part, Tennessee Rule of Civil Procedure 60.02 provides:

On motion and upon such terms as are just, the 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; (2) fraud (whether heretofore denominated intrinsic or extrinsic), misrepresentation, or other misconduct of an adverse ...

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