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Cornerstone Financial Credit Union v. Mundy

Court of Appeals of Tennessee, Nashville

October 23, 2019

CORNERSTONE FINANCIAL CREDIT UNION
v.
JOSHUA MUNDY

          Session March 7, 2019

          Appeal from the Circuit Court for Davidson County No. 18C1640 Hamilton V. Gayden, Jr., Judge

         A credit union initiated this action on December 12, 2007, by filing a civil warrant to recover an amount alleged to be due on an account. On June 14, 2011, after several unsuccessful attempts to serve the warrant, a return on service was filed indicating that the defendant had been served with the warrant; a default judgment in the amount of $13, 717.79 was entered on July 25, 2011. The credit union levied on the defendant's bank account on April 25, 2018, following which the defendant moved the general sessions court to set aside the judgment on the ground that service of the warrant was defective and the judgment was void; the court granted the motion and set the case for trial. Before the trial could be held, the credit union appealed to the circuit court, where the defendant moved for summary judgment to affirm the general sessions court's order setting aside the judgment. The circuit court dismissed the action pursuant to Tennessee Rule of Civil Procedure Rule 12.02(3), holding that service of the warrant was not in compliance with the applicable statutes. The credit union appeals. Upon our de novo review, we have determined that the record does not show that the defendant was duly served with the warrant that led to the default judgment and, as a result, the judgment entered against him is void. Because of the current proceeding, however, trial on the merits has not been held. Accordingly, we affirm the holding of the circuit court that the judgment of the general sessions court is void, modify the judgment of the circuit court to reinstate the credit union's cause of action, and remand the case to the circuit court with instruction to remand it to the general sessions court for trial.

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

          Charles Michels, Nashville Tennessee, for the appellant, Cornerstone Financial Credit Union.

          David M. Anthony, Nashville, Tennessee, for the appellee, Joshua Mundy

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

          OPINION

          RICHARD H. DINKINS, JUDGE.

         I. Factual and Procedural History

         Cornerstone Financial Credit Union initiated this action by filing a civil warrant in Davidson County General Sessions Court on December 12, 2007, against Joshua Mundy, seeking to recover the $10, 752.10 balance due on an account plus interest, attorney fees, and costs. The warrant, bearing a service address of 2310 Siefried Street, Nashville, was returned unserved on January 3, 2008, signed by a "C. Prater" with the notation "Joshua Mundy is not to be found in my county, other, not at address listed." A second warrant, issued on July 21, 2008, and listing a service address of Post Office Box 280471, Nashville, was returned on July 29. A third warrant, issued on June 16, 2009, bearing a service address of 1615 Underwood Street, Nashville, was returned June 22; both were signed as unserved by the same server. A fourth warrant, issued on June 8, 2011, for service at 1615 Underwood Street, Nashville, was returned signed by "J. Smith" on June 14, with the notation "served Joshua Mundy"; the warrant states that a hearing was set for July 25. On that day, a default judgment was entered against Mr. Mundy in the amount of $13, 717.79 ("the July 25 Judgment").

         Nearly seven years later, on April 25, 2018, Cornerstone levied upon Mr. Mundy's account at Pinnacle National Bank, seeking $20, 900.49 and capturing $17, 481.12. On May 21, Mr. Mundy moved the general sessions court to set aside the default judgment pursuant to Tennessee Rule of Civil Procedure 60.02(5) and to quash the levy, arguing that service of the warrant was defective and, accordingly, the court did not have personal jurisdiction over Mr. Mundy when it entered the judgment, thereby rendering the judgment void; he supported the motion with his affidavit. Cornerstone responded, and the motion was heard on May 31. The court entered an order on June 22, 2018, setting aside the July 25 Judgment and setting the case for a trial on August 1.

         Cornerstone appealed the general sessions court's ruling to Davidson County Circuit Court on June 25, 2018. Mr. Mundy moved for summary judgment, and filed a statement of undisputed material facts, supported by the same affidavit he had filed in general sessions court, and the affidavit of his counsel, David Anthony. Mr. Mundy argued that the court did not have personal jurisdiction over him and accordingly, the case should be either dismissed or remanded to the general sessions court. In turn, Cornerstone responded to the motion for summary judgment, moved the circuit court to dismiss the Motion to Set Aside that Mr. Mundy had filed in the general sessions court, arguing that Mr. Mundy should have filed a common law or statutory writ of certiorari instead, and to set the case for trial.

         The trial court heard all motions on August 17 and entered an order on August 24, dismissing the case pursuant to Tennessee Rule of Civil Procedure 12.02, holding that the return of process on the default judgment warrant "does not state the process server's address and does not describe the manner of service" and, consequently, that the service did not comply with Tennessee Code Annotated sections 16-15-901(b)[1] and 16-15-902(a).[2] Cornerstone appeals, stating two issues:

1.Whether the Trial Court erred when it held that the general sessions court lacked personal jurisdiction over Appellee at the time the general sessions court granted Appellant's July 25, 2011 judgment against Appellee, rendering the 2011 judgment void because the return of process, personally served upon Appellee, does not include: a) the address of the process server, the Davidson County Sheriff's Office; and b) a description of the manner of service, instead stating, "[c]ame to hand same day issued and executed as commanded on: served Joshua Mundy."
2.Whether the Trial Court erred when it failed to grant Appellant's Motion to Dismiss Appellee's Motion to Set Aside Judgment on the ground that such action should have been brought by statutory or common law writ of certiorari.

         II. Analysis

         As noted in Gordon v. Greenview Hosp., Inc., 300 S.W.3d 635, 643 (Tenn. 2009)), questions regarding the court's exercise of personal jurisdiction should be raised and decided pursuant to Tennessee Rule of Civil Procedure 12.02(2), notwithstanding the fact that matters outside the pleadings may be considered. "The plaintiff bears the ultimate burden of demonstrating that the trial court may properly exercise personal jurisdiction over a defendant." Id. (citing Chenault v. Walker, 36 S.W.3d 45, 56 (Tenn. 2001); Davis Kidd Booksellers, Inc. v. Day-Impex, Ltd., 832 S.W.2d 572, 577 (Tenn. Ct. App. 1992). A defendant who takes issue with personal jurisdiction may file a Rule 12.02(2) motion, which may be supported by affidavit or other evidentiary materials. Gordon, 300 S.W.3d at 643-44. If the defendant supports the motion with affidavits, the plaintiff "must establish its prima facie showing of personal jurisdiction over the defendant by filing its own affidavits or other written evidence." Id. at 644 (citing Chenault, 36 S.W.3d at 56 and Mfrs. Consolidation Serv., Inc. v. Rodell, 42 S.W.3d 846, 854-55 (Tenn. Ct. App. 2000)). "A decision regarding the exercise of personal jurisdiction over a defendant involves a question of law . . . [and] the appellate courts will review a trial court's decision to grant or deny a Tenn. R. Civ. P. 12.02(2) motion de novo with no presumption of correctness…." Id. at 645.

         In our analysis, we are also guided by the Tennessee Supreme Court's discussion of jurisdiction and judgments in Turner v. Turner:

A. Jurisdiction Generally
The lawful authority of a court to adjudicate a controversy brought before it depends upon that court having jurisdiction of the subject matter and jurisdiction of the parties. . . . Personal jurisdiction refers to the power of a court over the parties to the controversy to render a binding judgment.
. . . [P]ersonal jurisdiction recognizes and protects an individual liberty interest that flows from the Due Process Clause and requires that maintenance of the suit "not offend 'traditional notions of fair play and substantial justice.'" "It represents a restriction on judicial power not as a matter of sovereignty, but as a matter of individual liberty." Because the requirement of personal ...

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