BATTERY ALLIANCE, INC.
CLINTON BEITER ET AL.
Session November 13, 2019
from the Circuit Court for Shelby County No. CT-003843-17
Robert Samual Weiss, Judge
appeal the trial court's denial of its motion for relief
from a default judgment. In support of its motion, defendants
raised three grounds: (1) that the judgment was void due to
improper service of process; (2) that the judgment was void
due to improper notice related to the motion for default
judgment; and (3) the judgment should be set aside due to
mistake, inadvertence, surprise or excusable neglect. A
thorough review of the record indicates that the trial court
exercised its independent judgment to adjudicate only the
first of the three grounds alleged. As such, we vacate the
denial of the motion and remand for consideration of the
R. App. P. 3 Appeal as of Right; Judgment of the Circuit
Court Vacated and Remanded
Tidwell, Memphis, Tennessee, for the appellants, Clinton
Beiter, and Stored Energy Products, Inc.
Michael R. Marshall, Memphis, Tennessee, for the appellee,
Battery Alliance, Inc.
Steven Stafford, P.J., W.S., delivered the opinion of the
court, in which D. Michael Swiney, C.J., and Kenny Armstrong
STEVEN STAFFORD, JUDGE
September 18, 2017, Plaintiff/Appellee Battery Alliance, Inc.
("Battery Alliance") filed a complaint against
Defendants/Appellants Clinton Beiter and Stored Energy
Products, Inc. ("Stored Energy Products," and
together with Mr. Beiter, "Appellants"). The
complaint alleged breach of contract, unjust enrichment, and
estoppel and sought compensatory damages of $216, 256.89,
plus attorney's fees, costs, and additional charges that
accrued after the complaint was filed. A copy of the
complaint and summons was served on Appellants on October 4,
2017. Appellants did not file an answer to the
complaint, although negotiations between the parties'
representatives were ongoing.
November 6, 2017, Battery Alliance filed a motion for default
judgment. The motion did not state the date upon which the
hearing on the motion would take place. The certificate of
service on the motion stated that it was mailed to
Appellants' address. A second motion was later filed to
correct a typographical error. Again, the motion included a
certificate of service to Appellants but no date was provided
for the hearing. A hearing on the motion for default judgment
took place on November 17, 2017. Appellants did not appear,
and the trial court granted the motion for default judgment.
The order granting the motion for default judgment directed
Battery Alliance to file a motion for a writ of inquiry,
which the order stated would take place on January 11, 2018,
at 10:00 a.m. The order contained a certificate of service to
Appellants' address. On the same day, Appellants filed a
motion for a writ of inquiry; however, the certificate of
service included with the motion indicated that it was
inexplicably mailed to various unrelated persons with
addresses in Idaho, including the Idaho Department of
Correction, rather than Appellants' addresses in Florida.
The writ of inquiry hearing occurred as scheduled, and
Battery Alliance was awarded a judgment of $222, 644.74, plus
costs and fees.
months later, on May 8, 2018, Appellants filed a motion to
set aside the final judgment against them, arguing that the
judgment was void and/or that it should be set aside on the
ground of excusable neglect. Appellants attached to their
motion the affidavit of Mr. Beiter, as well as a form
indicating that Appellants had retained counsel near the time
motion for default judgment was heard. In general, Appellants
argued that they did not have proper notice of the action as
a whole or the default judgment proceedings in particular.
Alliance responded in opposition to the motion to set aside
on September 14, 2018. Therein, Battery Alliance asserted
that Appellants were properly served with the complaint and
summons and properly notified of the default judgment
hearing. Moreover, Battery Alliance alleged that Appellants
willfully failed to take any action to defend against the
complaint and failed to assert a meritorious defense in their
motion to set aside. In support, Battery Alliance attached
affidavits from the private process server, a verified return
of service, and various emails detailing the negotiations
between the parties that were taking place at the time of the
default judgment proceedings. Additionally, Battery Alliance
provided a letter dated November 7, 2017, stating the date
and time of the default judgment hearing. Although the letter
states that it was "Sent via USPS and email" to
Appellants, no email showing that the letter was sent was
included in the documents attached to Battery Alliance's
filed a reply to Battery Alliance's response on September
19, 2018, more fully detailing the grounds relied upon in
their motion. According to Appellants, three grounds
supported their request for relief from the default judgment:
(1) although Appellants were served with the summons, they
were not served with the complaint; (2) notice of the motion
for default judgment was void due to a violation of Rule
55.01 of the Tennessee Rules of Civil Procedure; and (3)
their failure to respond was due to mistake, inadvertence,
surprise or excusable neglect as Appellants were reasonably
relying on retained counsel to respond. Appellants also
provided argument as to their meritorious defense.
motion to set aside was heard on October 19, 2018. The
parties did not present testimony, instead relying on the
statements of counsel and the documents attached to the
parties' filings. During the hearing, service of process,
Rule 55.01, and excusable neglect were argued. At the
conclusion of the hearing, the trial court denied
Appellants' motion to set aside the default judgment.
Relying on Eluhu v. Richards, No.
M2005-00922-COA-R3-CV, 2006 WL 1521158, at *1 (Tenn. Ct. App.
June 2, 2006), the trial court ruled that service of process
was proper and that Appellants could not have the judgment
set aside where they thereafter took "no affirmative
action." The trial court directed counsel for Battery
Alliance to prepare a written order, which was entered on
October 31, 2018. Appellants thereafter appealed to this
Court. On May 6, 2019, an amended final order was entered to
comply with Rule 58 of the Tennessee Rules of Civil
parties each present two issues, with Appellants' two
issues spanning nearing an entire page. In our view, the
dispositive issue in this case is whether the trial court
erred in denying Appellants' Rule 60.02 motion.
Standard of Review
a trial court's decision to grant or deny motion under
Rule 60.02 of the Tennessee Rules of Civil Procedure is
reviewed for an abuse of discretion. Patterson v.
SunTrust Bank, 328 S.W.3d 505, 509 (Tenn. Ct. App.
2010); Tenn. Dep't of Human Serv. v. Barbee, 689
S.W.2d 863, 866 (Tenn. 1985). A trial court abuses its
discretion only when it applies an incorrect legal standard,
or reaches a decision which is against logic or reasoning
that causes an injustice to the party complaining."
Eldridge v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001)
(quoting State v. Shirley, 6 S.W.3d 243, 247 (Tenn.
1999)) (internal quotation marks and alterations omitted).
Where the judgment is alleged to be void under Rule 60.02(3),
however, we review the trial court's judgment de novo,
with no presumption of correctness. Hussey v. Woods,
538 S.W.3d 476, 483 (Tenn. 2017).