Double Check Your Served Summonses: Tennessee Legislature To Amend Service of Process Statute…Effective January 2020

A very terrifying issue has been circulating in Tennessee courts (well, terrifying to the Tennessee creditor’s rights bar) over the past year regarding service of process in Tennessee.

It all relates to 13 very plain, unambiguous words: “The process server must be identified by name and address on the return.”

That text is from Tenn. Code Ann. § 16-15-901(b), and, over the past ten months, courts throughout the State have been, rightfully so, throwing out lawsuits and setting aside default judgments where a served warrant lacks the process server’s name and address.

Note: When a statute uses the phrase “must be,” you’d better do what it says.

Here’s why: Where the warrant lacks this required information, it doesn’t comply with Tennessee law for valid service of process. Where there’s no valid service of process, there’s no jurisdiction over the defendant. Where there’s no jurisdiction, the Court can’t grant valid relief in a judgment in the proceeding.

This seems like a very low requirement to satisfy (name and address?), but it’s a big deal because, if you’ve ever dealt with process servers and/or you’ve seen a served Summons/Civil Warrant, you have to be diligent and watch for this defect.

Here’s the good news: Yesterday, the Tennessee Legislature took a big step toward amending this statute to give plaintiffs some relief. The Senate Judiciary Committee passed the proposed amendment (the House Bill is at 0393 (and the Senate Bill is at 0456). The proposed law would take effect on January 1, 2020.

Disclaimer: I’m the lead counsel–for the judgment debtor–on one of the two primary cases that brought this issue to a head in 2018.

Second Disclaimer: I’m one of the legislative liaisons with the Tennessee Bar Association who worked on this text and met with the Tennessee Legislators/sponsors a few weeks ago to change this statute.

Third Disclaimer: I’m arguing my case on the old law tomorrow in front of the Tennessee Court of Appeals.

All this reminds me of the old lawyer joke, the one where a lawyer sees a car crash, runs up, and says “I saw everything that happened, and I’ll take either side!”

It’s a funny joke, but, please know, for the next eight months…check your Summonses and Civil Warrants to make sure they comply with the existing law. If you don’t, that sound you’ll hear will probably sound like a car crash.

New Tennessee Court of Appeals Case: To Set Aside a Default Judgment, Movant Must Comply with Rule 60.02 and Show a Meritorious Defense

When a Defendant doesn’t file an Answer to a Complaint in the required 30 days (and never files even a late Answer), the Plaintiff can ask for a Judgment “by default,” i.e. as a result only of the Defendant’s failure to respond.

This happens a lot in Chancery Court collections cases. Conventional wisdom says that, if the Defendant doesn’t have the money to pay the debt, then he probably doesn’t have the money to pay a lawyer to fight the lawsuit.

About once or twice a year, after complete silence from a defendant (and after I get a judgment), I’ll receive a “Motion to Set Aside a Default Judgment,” asking the Court to undo the Judgment and allow him to litigate the matter.

I’ve seen all kinds of excuses. One Debtor had a heart condition and didn’t want to deal with the stress. Another says his lawyer forgot to tell him about the Motion. Or the postman didn’t deliver it. Or all of the above.

A rule of thumb is that Tennessee courts dislike defaults, and the courts would rather matters be decided on the merits. That’s what all the Motions to Set Aside always say.

Last week, the Tennessee Court of Appeals issued a new opinion in Monroe v. Monroe (a divorce case) that contains a good, precise statement of the standards for setting a default judgment aside.

The Court confirmed that default judgments aren’t favored and a Court will err on the side of the moving party, but the moving party must show that relief is appropriate under Tenn. R. Civ. P. 60.02 and that it has a “meritorious defense” to the lawsuit.

Rule 60.02 requires a showing of mistake, inadvertence, surprise, or excusable neglect. That’s not enough, however: the moving party must also show some sort of defense to the action.

The second prong is designed to prevent a party setting aside a judgment, only to suffer an inevitable summary judgment a month later because they didn’t have any defenses.

I’d add that a Motion under Rule 60.02 must be made within a  “reasonable time” and, generally, no later than a year after the Judgment.

As a creditor’s lawyer, I hate these. Leave my judgments alone.