Greater Canton Ford Mercury, Inc. v. Lane
| Docket Number: | 2007-CA-00952-SCT Linked Case(s): 2007-CA-00952-SCT |
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| Supreme Court: | Opinion Link Opinion Date: 10-16-2008 Opinion Author: Lamar, J. Holding: AFFIRMED IN PART; VACATED IN PART AND REMANDED |
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| Additional Case Information: |
Topic: Contract - Default judgment - M.R.C.P. 55(c) - M.R.C.P. 60(b) - M.R.E. 802 - M.R.E. 803(6) - M.R.E. 902 - Damages - M.R.C.P. 55(b) Judge(s) Concurring: Smith, C.J., Waller and Diaz, P.JJ., Carlson, Graves and Randolph, JJ. Dissenting Author : Easley, J., without separate written opinion. Concur in Part, Dissent in Part 1: Dickinson, J. with separate written opinion. Procedural History: Default Judgment Nature of the Case: CIVIL - CONTRACT |
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| Trial Court: |
Date of Trial Judgment: 05-14-2007 Appealed from: MADISON COUNTY CIRCUIT COURT Judge: William E. Chapman, III Disposition: The trial court denied Greater Canton Ford Mercury's Motion to Set Aside Default Judgment and whether the evidence supported the awarded actual, noneconomic, and punitive damages. Case Number: CI2003-0200-C |
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| Party Name: | Attorney Name: | Brief(s) Available: | ||
| Appellant: | Greater Canton Ford Mercury, Inc. |
Thomas A. Wicker |
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| Appellee: | Pearl Lee Lane | Benjamin R. Henley; J. Peyton Randolph, II | ||
Synopsis provided by:  If you are interested in subscribing to the weekly synopses of all Mississippi Supreme Court and Court of Appeals hand downs please contact Tammy Upton in the MLI Press office. |
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| Topic: | Contract - Default judgment - M.R.C.P. 55(c) - M.R.C.P. 60(b) - M.R.E. 802 - M.R.E. 803(6) - M.R.E. 902 - Damages - M.R.C.P. 55(b) |
| Summary of the Facts: | Pearl Lane filed a complaint against Greater Canton Ford Mercury, Inc., alleging that Greater Canton had failed to honor an extended warranty that Lane had purchased with her 1997 Mercury Sable. She asserted claims of breach of contract, fraud, bad faith, intentional infliction of emotional distress, negligent infliction of emotional distress, and breach of duty of good faith and fair dealing. Lane also requested that the trial court award her punitive damages and damages for damage to credit reputation, loss of transportation, severe emotional distress, breach-of-contract damages, breach-of-warranty damages, and loss of income. Greater Canton was served through its registered agent, C.T. Corporation Systems, with summons and complaint on July 25, 2003. When Greater Canton failed to answer within thirty days, Lane filed an Application to Clerk for Entry of Default and Supporting Affidavit. The judge granted default judgment on September 12, 2005. He awarded Lane $15,000 in actual damages, $10,000 in noneconomic damages, $135,000 in punitive damages, and $120 in costs, for a total of $160,120. On June 28, 2006, Greater Canton filed a Motion to Set Aside Default Judgment. The court denied the motion, and Greater Canton appeals. |
| Summary of Opinion Analysis: | Issue 1: Default judgment Greater Canton argues that the default judgment should be set aside. Under M.R.C.P. 55(c), once a default judgment has been entered, the defaulting party may move the court to set aside the default judgment pursuant to M.R.C.P. 60(b). If the basis of a motion to set aside default judgment is Rule 60(b)(1)-(3), the trial court has no discretion to grant the motion if it is made more than six months after the final judgment. Relief from a default judgment may be granted pursuant to Rule 60(b)(6) in exceptional and compelling circumstances when relief is not warranted by the preceding clauses, or when it is uncertain that one or more of the preceding clauses afford relief. Greater Canton’s Motion to Set Aside Default Judgment failed to recite which clause of Rule 60(b) it proceeded under, and the default judgment does not indicate the clause under which the court denied relief. Greater Canton argues that its Motion to Set Aside Default Judgment was made pursuant to Rule 60(b)(6). Greater Canton’s assertion of a defense could fall within the language “any other reason justifying relief” of Rule 60(b)(6). Greater Canton must first show it had good cause for the default, because it was no longer an active business when it was served with process. The trial court had before it undisputed evidence that Greater Canton’s registered agent accepted service of process. While the registered agent failed to give the summons and complaint to an officer or director, it did forward it to an accounting firm designated to handle Greater Canton’s business affairs, which in turn forwarded the complaint to Greater Canton’s insurer. Furthermore, all parties who saw the summons and complaint could clearly read that an answer was due within thirty days from the date of acceptance of service of process. Thus, Greater Canton failed to put forth evidence of good cause. With regard to whether Greater Canton demonstrated a colorable defense, Greater Canton argues that it submitted an affidavit by a former business manager and a supporting document that established Lane had cancelled the warranty before any repairs were made. However, the affidavit completely relied upon and incorporated an attached cancellation worksheet for the defense that Lane had cancelled the warranty prior to any repairs. The affidavit does not present a meritorious defense since the cancellation worksheet is inadmissible hearsay pursuant to M.R.E. 802. The cancellation worksheet was not qualified as an exception to the hearsay rule pursuant to M.R.E. 803(6) or authenticated under M.R.E. 902. Thus, Greater Canton failed to assert a meritorious defense. Greater Canton failed to present any evidence or argument that Lane would not suffer prejudice if the default judgment was set aside, and Lane put forth sufficient evidence of prejudice. Thus, the court did not err in granting summary judgment. Issue 2: Damages Pursuant to M.R.C.P. 55(b), the trial court may hold a hearing to determine the amount of damages to award in a default judgment. If the damages are unliquidated, the court must hold a hearing on the record. Damages awards must be supported by evidence, and such evidence must be reflected in the record if it is to be affirmed on appeal. In the context of default-judgment cases, the record must also reflect how the damages are calculated. The language in the default judgment verifies that a hearing was, in fact, held to determine the amount of unliquidated damages. However, no record exists of the hearing, and the default judgment is devoid of any explanation concerning the damages. The cost of the extended warranty, $1,060, is the only evidence of damages reflected in the record. Because there is no evidence to judge whether the awarded damages are reasonable and supported by the evidence, the judgment as to damages is vacated and the case remanded for a damages hearing on the record. |
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