DR. VICTOR W. McLAUGHLIN, M.D.
ELIZABETH KING McLAUGHLIN A/K/A REV. ELIZABETH KING
Session: July 18, 2019.
from the Chancery Court for Anderson County No. 16CH7875 M.
Nichole Cantrell, Chancellor No. E2018-01319-COA-R3-CV
plaintiff filed this action on a sworn account, seeking to
recover $20, 451.00 that he had allegedly loaned in several
money transfers to the defendant, plus prejudgment interest
and costs. In her answer to the complaint, the defendant
denied all substantive allegations but failed to raise any
affirmative defenses. At trial, the defendant stipulated to
having received the money transfers. However, she requested
that the court allow her to orally swear under oath that the
transfers did not constitute a valid debt. The trial court
found that the defendant was attempting to assert an
affirmative defense that the transfers constituted gifts
rather than loans and that she had waived such a defense
pursuant to Tennessee Rule of Civil Procedure 8.03 by failing
to raise it in her responsive pleading. The trial court
entered a judgment in favor of the plaintiff in the total
amount of $33, 942.69, including prejudgment interest. The
defendant filed a motion to alter or amend, requesting that
the judgment be vacated on the ground that under Tennessee
Code Annotated § 24-5-107 (2017), she should have been
allowed to raise any defense orally at trial. Following a
hearing, the trial court found that because the defendant had
elected to file a responsive pleading, she was required to
raise the affirmative defense in the pleading. The trial
court thereby declined to vacate the judgment. The defendant
has appealed. Discerning no reversible error, we affirm.
R. App. P. 3 Appeal as of Right; Judgment of the Chancery
W.Varsalona and Elizabeth M. Burrell, Clinton, Tennessee, for
the appellant, Elizabeth King McLaughlin a/k/a Rev. Elizabeth
J. Levitt, Jr., Knoxville, Tennessee, for the appellee, Dr.
Victor W. McLaughlin, M.D.
R. Frierson, II, J., delivered the opinion of the court, in
which D. Michael Swiney, C.J., and Frank G. Clement, Jr.,
P.J., M.S., joined.
R. FRIERSON, II, JUDGE.
Factual and Procedural Background
plaintiff, Victor W. McLaughlin, M.D. ("Dr.
McLaughlin"), is the former father-in-law of the
defendant, Elizabeth King McLaughlin a/k/a Rev. Elizabeth
King ("Ms. King"). On March 11, 2016, Dr. McLaughlin
filed a complaint in the Anderson County Chancery Court
("trial court"), averring that during a time period
spanning June 8, 2010, through July 31, 2012, Ms. King had
received twenty-seven loans from him in the total principal
amount of $20, 451.00. He requested a judgment in the total
amount of $31, 085.15, including the principal and accrued
interest, plus ten-percent prejudgment interest and
discretionary costs. Dr. McLaughlin attached to his complaint
a "Sworn Account," executed by him and stating that
the amount requested was "justly due and owing" to
him by Ms. King. On April 25, 2016, Ms. King filed an answer,
denying all substantive allegations but asserting no
affirmative defense. Ms. King's answer was signed by her
attorney on her behalf. The answer was not signed by Ms. King
personally, and no affidavit was attached.
trial court conducted a hearing on July 25, 2017. No
transcript or statement of the evidence for this hearing is
in the appellate record. However, the record does contain an
exhibit presented during the hearing by Dr. McLaughlin and
stipulated to by Ms. King ("Stipulated Exhibit").
The Stipulated Exhibit, titled, "Plaintiff's loans
to Defendant with simple interest at 10% per annum,"
reflects that Ms. King acknowledged receiving twenty-seven
money transfers from Dr. McLaughlin's bank account to her
bank account between the dates of June 8, 2010, and July 31,
2012. Each transfer is listed under a column labeled,
"Loan," and the Stipulated Exhibit concludes with
Total Accrued Interest
August 18, 2017, the trial court entered a "Final
Judgment," granting to Dr. McLaughlin a money judgment
in the amount of $33, 942.69 and assessing costs against Ms.
King. Noting that it had considered the pleadings, the
Stipulated Exhibit, the arguments of counsel, and the record
as a whole, the trial court specifically found:
a) That from time to time between June 8, 2010 and July 31,
2012, [Ms. King] did receive bank transfers from [Dr.
McLaughlin] totaling $2, 451.00.
b) That [Dr. McLaughlin] contends that each of these
transfers was a loan to [Ms. King].
c) That [Ms. King] denies owing [Dr. McLaughlin] any money.
d) That there is case law presumption that such transfers are
a loan and not a gift.
e) That under that case law presumption the burden of proof
shifts to [Ms. King] to prove the affirmative defense that
such transfers were a gift and not a loan.
f) Tennessee Rules of Civil Procedure, Rule 8.03 states that
affirmative defenses shall be pled in responsive pleadings.
g) That [Ms. King's] pleadings in this case do not raise
any affirmative defense.
h) That because [Ms. King] has failed to plead any
affirmative defense she may not seek to prove an affirmative
defense at trial. Any such defense is waived.
i) That [Dr. McLaughlin] is entitled to recover $20, 451.00
in principal loans to [Ms. King] and interest in the amount
of $13, 491.69, for a total of $33, 942.69.
King filed a "Motion to Alter or Amend/Reconsider,"
pursuant to Tennessee Rule of Civil Procedure 59.04, on
September 7, 2017, requesting that the trial court vacate the
final judgment and reset for trial. Ms. King stated in her
motion that during the July 25, 2017 hearing, her counsel had
informed the trial court that Ms. King "was prepared to
orally deny the Complaint on Sworn Account and proceed with
the trial." As noted in the trial court's order, the
court denied Ms. King's counsel's request and took
the matter under advisement, ultimately concluding that Ms.
King was required to raise an affirmative defense in her
pleadings pursuant to Tennessee Rule of Civil Procedure 8.03.
In her motion to alter or amend, Ms. King requested that she
"be allowed to orally deny the Complaint on Sworn
Account, as dictated in T.C.A. § 24-5-107, and proceed
with the evidentiary trial," or, alternatively, that she
"be allowed to present evidence in support" of her
position. Dr. McLaughlin filed a response objecting to the
motion to alter or amend.
a hearing, the trial court entered an order on November 9,
2017, denying Ms. King's request to vacate the judgment.
However, the trial court, sua sponte upon
consideration of the record, amended the previous order by
vacating the award of interest. The court found that
"there was no evidence offered by [Dr. McLaughlin] at
the time of the trial that would provide proof that [Dr.
McLaughlin] was entitled to interest on the princip[al] of
$20, 451.00." In this order, the trial court directed
the parties to "appear before this Court to offer proof
and argument regarding the interest amount owed, if any"
upon the principal awarded to Dr. McLaughlin.
denying Ms. King's request to vacate the award of
principal, the trial court specifically found:
Upon the calling of the case and the beginning of the trial,
the parties entered into a [Stipulated Exhibit]. The
stipulation was that [Ms. King] acknowledges that she
received from [Dr. McLaughlin] numerous amounts of money via
check totaling the amount of $20, 451.00. Upon the
stipulation being made [Dr. McLaughlin] moved for a Judgment
on the Pleadings.
* * *
[Dr. McLaughlin] argued that [Ms. King] availed [herself] of
the option to enter an Answer to the Complaint instead of
relying on the statu[te] T.C.A. § 24-5-107(b) which
would allow [Ms. King] to appear and orally deny the account
under oath and that T.R.C.P. [8.03] applies ...