IN THE SUPREME COURT OF MISSISSIPPI
NO. 2013-CA-02100-SCT
WILLIAM CHRISTOPHER TUCKER
v.
GAY ST. MARY WILLIAMS AND LARRY
WILLIAMS
DATE OF JUDGMENT: 11/22/2013
TRIAL JUDGE: HON. WINSTON L. KIDD
TRIAL COURT ATTORNEYS: TOBY JUSTIN GAMMILL
WHITNEY GLADDEN
JACOB DANE KING
CHUCK McRAE
COURT FROM WHICH APPEALED: CIRCUIT COURT OF THE FIRST JUDICIAL
DISTRICT OF HINDS COUNTY
ATTORNEYS FOR APPELLANT: MICHAEL ANDREW RUEFF
TOBY JUSTIN GAMMILL
JACOB DANE KING
ATTORNEYS FOR APPELLEES: SETH CLAYTON LITTLE
CHUCK McRAE
CHRISTOPHER ANTHONY BAMBACH
NATURE OF THE CASE: CIVIL - PERSONAL INJURY
DISPOSITION: REVERSED AND REMANDED - 08/04/2016
MOTION FOR REHEARING FILED:
MANDATE ISSUED:
BEFORE WALLER, C.J., KITCHENS AND COLEMAN, JJ.
KITCHENS, JUSTICE, FOR THE COURT:
¶1. Gay St. Mary Williams and her husband, Larry Williams, filed a complaint against
William Christopher Tucker and two insurance companies in the Circuit Court of Hinds
County, First Judicial District. The Williamses alleged that Gay St. Mary Williams had been
severely injured in a motor vehicle accident caused by Tucker. When Tucker failed to
answer, the circuit clerk entered a default. The trial court denied Tucker’s motion to set aside
the entry of default and his motion for reconsideration. After a hearing, the trial court
awarded damages in the amount of $2,962,984.60, plus $300,000 to Larry Williams for loss
of consortium, and entered a default judgment in favor of the Williamses.
¶2. Tucker appeals, arguing that the trial court’s refusal to set aside the entry of default
was an abuse of discretion. Alternatively, he challenges portions of the damages award. This
Court finds that, under Mississippi’s liberal standard applicable to setting aside entries of
default, which requires a default entry to be set aside in the interests of justice, the trial court
abused its discretion by refusing to set aside the entry of default in this case. Therefore, we
reverse the judgment of the circuit court and remand this case for further proceedings.
FACTS
¶3. On February 4, 2010, Kentucky residents Gay St. Mary Williams and Larry Williams
filed a complaint against Tucker, Zurich North American Insurance Company (Zurich),
Shelter Insurance Company (Shelter), and John Does 1-5.1 A “corrected” complaint, filed
four days later, alleged that, on or about February 9, 2007, Gay St. Mary Williams was
driving a rental car in the left-turn lane of North State Street in Jackson, Mississippi, facing
north and preparing to turn left onto Beasley Road. As Gay St. Mary Williams was turning
left across the southbound lane, her vehicle was struck by the vehicle of Tucker, who was
driving south on North State Street. The Williamses alleged that Tucker recklessly and
negligently had failed to keep a proper lookout and that she had failed to yield to oncoming
1
The Williamses alleged in the complaint that insurance policies from Zurich and
Shelter provided insurance coverage for the accident.
2
traffic. The Williamses also averred that, due to Tucker’s careless, negligent, and reckless
acts, Gay St. Mary Williams suffered multiple facial and back fractures and facial lacerations,
and that she experiences permanent, constant pain and suffering and emotional distress. The
Williamses claimed damages for Gay St. Mary Williams’s physical pain, mental anguish and
loss of enjoyment of life, medical expenses, lost employment, and lost wages. Larry Williams
asserted a loss of consortium claim.
¶4. Zurich and Shelter filed answers to the complaint. On June 28, 2010, the court ordered
that Zurich be dismissed and that Maryland Casualty Company (Maryland) be substituted as
a party defendant. Maryland filed an answer and later moved for summary judgment. Shelter
also moved for summary judgment. On July 27, 2011, the Williamses filed a motion for
additional time to respond to Shelter’s motion for summary judgment. See M.R.C.P. 56(f).
¶5. On June 15, 2010, more than four months after filing the complaint, the Williamses
filed an application for entry of default against Tucker for “failure to plead, answer, or
otherwise defend.” See M.R.C.P. 55(a).2 The clerk entered default against Tucker on the
2
Rule 55(a)-(c), which is central to this appeal, provides:
(a) Entry. When a party against whom a judgment for affirmative relief is
sought has failed to plead or otherwise defend as provided by these rules and
that fact is made to appear by affidavit or otherwise, the clerk shall enter his
default.
(b) Judgment. In all cases the party entitled to a judgment by default shall
apply to the court therefor. If the party against whom judgment by default is
sought has appeared in the action, he (or if appearing by representative, his
representative) shall be served with written notice of the application for
judgment at least three days prior to the hearing of such application; however,
judgment by default may be entered by the court on the day the case is set for
trial without such three days’ notice. If in order to enable the court to enter
3
same day. Then, also on the same day, the Williamses filed a motion for a default judgment.
See M.R.C.P. 55(b). On October 22, 2010, the Williamses filed an application for a default
judgment on the issues of liability and damages.
¶6. Tucker filed a motion to set aside the entry of default dated November 5, 2010.3 In the
motion, Tucker stated that his “insurance carrier was notified of the entry of default via
property damage arbitration.” Tucker argued that he had a meritorious defense to the civil
action, that the defendants had not been prejudiced by the delay, and that the default should
be set aside for good cause or in the interests of justice. Tucker attached his answer to the
motion.
¶7. A hearing occurred on the motion on January 24, 2011. During the hearing, Tucker’s
counsel argued that the default entry should be set aside because Tucker had strong defenses
to the Williamses’ action. When the trial court asked “what’s a good cause, what’s your
explanation for the default entered,” Tucker’s counsel responded that he had no information
about why Tucker had not given the complaint to his insurer. He also stated that the insurer
judgment or to carry it into effect it is necessary to take an account or to
determine the amount of damages or to establish the truth of any averment by
evidence or to make an investigation of any other matter, the court may
conduct such hearing with or without a jury, in the court’s discretion, or order
such references as it deems necessary and proper.
(c) Setting Aside Default. For good cause shown, the court may set aside an
entry of default and, if a judgment by default has been entered, may likewise
set it aside in accordance with Rule 60(b).
M.R.C.P. 55.
3
No docket entry reflects the filing of Tucker’s motion to set aside the clerk’s entry
of default. The trial court ruled on the motion on July 1, 2011.
4
had filed an answer immediately upon receiving notice of the lawsuit. On July 1, 2011, the
trial court denied the motion to set aside the entry of default.
¶8. On July 26, 2011, Tucker filed a motion for reconsideration. Again, Tucker argued
that he had colorable defenses to the Williamses’ claims and that the Williamses had suffered
no prejudice. Tucker averred that, in 2007, he had sued Gay St. Mary Williams in the United
States District Court for the Southern District of Mississippi for damages incurred in the
same accident that is the subject of the Williamses’ present lawsuit. Tucker attached the
October 31, 2008, settlement agreement showing that Gay St. Mary Williams had settled the
lawsuit with Tucker for $400,000.4 Tucker also attached an accident reconstruction report
he had obtained for the district court litigation that concluded that Gay St. Mary Williams had
been at fault in the accident. He also attached his own affidavit stating that the reason he had
failed to send the complaint to his insurer was that he had thought it was a request for his
statement in Williams’s suit against her insurer, and he did not realize he also was a
defendant in that lawsuit. Tucker argued that the trial court should set aside the entry of
default due to his colorable defenses and the lack of prejudice to the Williamses.5
¶9. At the hearing on October 24, 2011, Tucker argued that the default entry should be
set aside due to his allegations of colorable defenses and his contention with regard to lack
4
After the settlement, on January 12, 2009, the district court dismissed the case with
prejudice, finding that “it appear[s] that this entire cause has been compromised and settled
as between and among the parties.”
5
The Williamses moved to strike the exhibits that Tucker had filed with the motion
for reconsideration, but the trial court never ruled on that motion. Thus, the exhibits were
before the trial court when it denied the motion for reconsideration.
5
of prejudice. He raised the colorable defenses of the accident reconstruction report and that
the Williamses’ lawsuit was barred because Gay St. Mary Williams should have raised any
claims arising out of the accident as compulsory counterclaims in the district court litigation.
The Williamses argued that the default entry should stand because Tucker had provided no
reason for his failure to answer. The trial court asked Tucker’s counsel about the reason for
the default, and when counsel was unable to provide the reason Tucker had not timely filed
an answer, the trial court responded, “That’s all I need.” On November 10, 2011, the trial
court denied the motion for reconsideration, because “inasmuch as the Defendant has given
no reason for the failure to timely respond to the complaint, good cause does not exist to lift
the Clerk’s entry of default.”
¶10. On June 14, 2013, the trial court held an evidentiary hearing on damages. Before the
Williamses presented any evidence, Tucker again challenged the default entry, and the trial
court again denied relief. The Williamses presented evidence consisting of Larry Williams’s
testimony, depositions of Gay St. Mary Williams’s treating physicians, and medical records
and medical bills. The trial court awarded noneconomic damages of $1,000,000, which were
included in a total award of $2,962,984.60. In addition, the trial court awarded Larry
Williams $300,000 on his loss of consortium claim. On November 22, 2013, finding no just
reason for delay, the trial court directed the entry of a Rule 54(b) final judgment in these
amounts against Tucker, with six percent interest to run from the date of judgment. See
M.R.C.P. 54(b).
6
¶11. Tucker appeals, arguing that the default judgment should be reversed because the trial
court’s failure to set aside the entry of default was an abuse of discretion. He also argues that
the trial court erroneously considered certain evidence submitted at the damages hearing, and
that the damages award was not supported by substantial evidence. The Williamses argue that
appellate review of the entry of default is procedurally barred and that other procedural
defects prevent this Court’s review of this appeal. Alternatively, the Williamses contend that
the trial court’s refusal to set aside the default entry was not an abuse of discretion, and that
substantial admissible evidence supported the damages award. Because we reverse the
default judgment, we do not address Tucker’s alternative argument on damages.
DISCUSSION
I. WHETHER APPELLATE REVIEW OF THE ENTRY OF DEFAULT
IS PROCEDURALLY BARRED.
¶12. Rule 4(a) of the Rules of Appellate Procedure provides that a notice of appeal must
be filed “within thirty days after the date of entry of the judgment or order appealed from.”
M.R.A.P. 4(a). Under the final judgment rule, “[g]enerally, only final judgments are
appealable.” M.W.F. v. D.D.F., 926 So. 2d 897, 899 (Miss. 2006) (citing M.R.A.P. 5). The
Williamses contend that, because Tucker did not file a notice of appeal within thirty days
after the date the trial court denied his motion for reconsideration, he is barred from
challenging the trial court’s refusal to set aside the clerk’s entry of default. This argument
turns on whether the denial of the motion for reconsideration was a final judgment from
which an appeal could have been taken.
7
¶13. The trial court denied Tucker’s motion to set aside the default entry on July 1, 2011.
On July 26, 2011, Tucker filed his motion for reconsideration of that order, citing Rule 60(b),
which provides that, on motion, the court may relieve a party of a “final judgment, order, or
proceeding.” M.R.C.P. 60(b). The Williamses argue that, because this Court has held that an
order denying a Rule 60(b) motion to reconsider “is a final judgment for purposes of appeal,”
Pruett v. Malone, 767 So. 2d 983, 985 (Miss. 2000), Tucker had to perfect his appeal within
thirty days after the trial court denied the motion for reconsideration. The Williamses argue
that, because Tucker failed to perfect his appeal in a timely manner, he cannot seek appellate
relief from the trial court’s refusal to set aside the clerk’s entry of default.
¶14. In response, Tucker correctly argues that the order denying the motion for
reconsideration was an interlocutory order from which no appeal was available. A clerk’s
entry of default is an “interlocutory step that is taken under Rule 55(a) in anticipation of a
final judgment by default under Rule 55(b).” 10A Charles A. Wright & Arthur R. Miller,
Federal Practice and Procedure § 2692 (3d ed. 1998). Likewise, the order denying Tucker’s
motion to set aside the default entry was an interlocutory order, not a final, appealable
judgment. And although Tucker invoked Rule 60(b) in his motion for reconsideration of that
order, the order denying reconsideration also was an interlocutory order.
¶15. We observe that Tucker’s reliance on Rule 60(b) in his motion for reconsideration was
incorrect. Rule 60(b) provides a method for obtaining relief from a “final judgment, order,
or proceeding.” M.R.C.P. 60(b). The trial court has the authority to grant relief from an
interlocutory order under Rule 54(b), which provides that:
8
any order or other form of decision, however designated which adjudicates
fewer than all of the claims or the rights and liabilities of fewer than all of the
parties shall not terminate the action as to any of the claims or parties and the
order or other form of decision is subject to revision at any time before the
entry of judgment adjudicating all the claims and the rights and liabilities of
all the parties.
M.R.C.P. 54(b) (emphasis added); Moses H. Cone Mem’l Hosp. v. Mercury Constr. Corp.,
460 U.S. 1, 12, 103 S. Ct. 927, 74 L. Ed. 2d 765 (1983); 18B Charles A. Wright & Arthur
R. Miller, Federal Practice and Procedure § 4478.1 (2d ed. 2002).
¶16. Tucker’s mistaken citation to Rule 60(b) instead of Rule 54(b) in his motion for
reconsideration is immaterial to our resolution of this issue. The trial court’s authority to
reconsider its order derived from Rule 54(b), and the order denying the motion for
reconsideration was an interlocutory order from which no appeal was available. After the
trial court had entered the default judgment, Tucker timely filed his notice of appeal from the
trial court’s subsequent entry of a Rule 54(b) final judgment respecting fewer than all of the
claims and fewer than all of the parties. M.R.C.P. 54(b). Tucker’s appeal properly is before
this Court.
II. WHETHER OTHER PROCEDURAL DEFECTS PREVENT
APPELLATE REVIEW.
¶17. The Williamses argue that Tucker waived his argument that the default judgment
should be reversed by failing to identify that argument in the statement of issues. Mississippi
Rule of Appellate Procedure 28(a)(3) sets out the following requirement for an appellant’s
brief:
Statement of Issues. A statement shall identify the issues presented for
review. No separate assignment of errors shall be filed. Each issue presented
9
for review shall be separately numbered in the statement. No issue not
distinctly identified shall be argued by counsel, except upon request of the
court, but the court may, at its option, notice a plain error not identified or
distinctly specified.
M.R.A.P. 28(a)(3). Tucker set forth two issues in his statement of the issues: “A. THE
TRIAL COURT ERRED IN FAILING TO SET ASIDE THE CLERK’S ENTRY OF
DEFAULT ENTERED AGAINST TUCKER” and “B. THE TRIAL COURT ERRED IN
CONSIDERING THE EVIDENCE AND TESTIMONY IN THE DAMAGES HEARING.”
In the body of his argument on the first issue, Tucker makes assertions applicable both to the
clerk’s entry of default and to the default judgment.
¶18. We find that Tucker’s argument that the default judgment should be reversed is
properly before the Court. Because the clerk’s entry of default is a prerequisite to a default
judgment, an appellate finding that the trial court should have granted a motion to set aside
the clerk’s entry of default means that the default judgment also must be reversed. See
Allstate Ins. Co. v. Green, 794 So. 2d 170, 174 (Miss. 2001). Therefore, Tucker’s statement
of the issues in which he challenged the entry of default also was a sufficient challenge to the
default judgment.
¶19. The Williamses also contend that Tucker was unable to use Rule 60(b) as an avenue
for relief because no exceptional and compelling circumstances existed. See Pruett, 767 So.
2d at 986 (stating that “[r]elief pursuant to Rule 60(b)(6) is reserved for ‘exceptional and
compelling circumstances’”). They argue that “[r]econsideration of a judgment after its entry
is an extraordinary remedy that should be used sparingly.” Point S. Land Trust v. Gutierrez,
997 So. 2d 967, 975 (Miss. Ct. App. 2008). But, as established above, because no final
10
judgment had been entered, Rule 54(b), not Rule 60(b), provided the mechanism for the trial
court to rule on Tucker’s motion for reconsideration. Thus, the finality considerations
attendant to Rule 60(b) were not present.
¶20. Finally, the Williamses argue that Tucker cannot rely in this appeal on the attachments
to his motion for reconsideration. They contend that a motion for reconsideration cannot be
used to raise arguments that should have been raised in the prior proceedings. See Gutierrez,
907 So. 2d at 976. With this argument, the Williamses in effect reiterate their motion to strike
the attachments from Tucker’s motion for reconsideration. Because the trial court never ruled
on the motion to strike, the attachments were before that court when it ruled on the motion
for reconsideration. And, because the Williamses never secured a ruling from the trial court
on the motion to strike, they have waived consideration of this issue on appeal. “‘[T]he
affirmative duty rests upon the party filing the motion to follow up his action by bringing it
to the attention of the trial court.’ A motion that is not ruled upon is presumed abandoned.”
Cossitt v. Alfa Ins. Corp., 726 So. 2d 132, 135 (Miss. 1998) (citation omitted).
III. WHETHER THE DEFAULT JUDGMENT SHOULD BE REVERSED
BECAUSE THE TRIAL COURT’S REFUSAL TO SET ASIDE THE
ENTRY OF DEFAULT WAS AN ABUSE OF DISCRETION.
¶21. Tucker argues that the trial court’s refusal to set aside the clerk’s entry of default was
an abuse of its discretion. We emphasize that Tucker challenges the entry of default. But,
because the standards for setting aside an entry of default under Rule 55(c) and setting aside
a default judgment under Rule 60(b) are interrelated, we address the standards attendant to
both rules.
11
¶22. Under Rule 55(c), the trial court may set aside an entry of default “for good cause
shown.” M.R.C.P. 55(c). But when a default judgment has been entered, a party must seek
relief under Rule 60(b) by filing a motion to set aside the default judgment. M.R.C.P. 55(c)
(stating that, “if a judgment by default has been entered, [the court] may likewise set it aside
in accordance with Rule 60(b)”). Under Rule 60(b), the trial court may relieve a party of a
final judgment for the following reasons:
(1) fraud, misrepresentation, or other misconduct of an adverse party;
(2) accident or mistake;
(3) newly discovered evidence which by due diligence could not have been
discovered in time to move for a new trial under Rule 59(b);
(4) the judgment is void;
(5) the judgment has been satisfied, released, or discharged, or a prior
judgment upon which it is based has been reversed or otherwise vacated, or it
is no longer equitable that the judgment should have prospective application;
(6) any other reason justifying relief from the judgment.
M.R.C.P. 60(b).
¶23. When ruling on a Rule 60(b) motion to set aside a default judgment, the trial court
must consider a three-part balancing test. BB Buggies, Inc. v. Leon, 150 So. 3d 90, 101
(Miss. 2014). The trial court must determine (1) “the nature and legitimacy of the defendant’s
reasons for his default, i.e., whether the defendant has good cause for default,” (2) “whether
the defendant in fact has a colorable defense to the merits of the claim,” and (3) “the nature
and extent of prejudice which may be suffered by the plaintiff if the default judgment is set
12
aside.” BB Buggies, 150 So. 3d at 101 (quoting Am. States Ins. Co. v. Rogillio, 10 So. 3d
463, 468 (Miss. 2009)).
¶24. “[A]n application for vacation of [a default] judgment is addressed to the sound
discretion of the trial court.” Guaranty Nat’l Ins. Co. v. Pittman, 501 So. 2d 377, 388 (Miss.
1987). The trial court should exercise its discretion within the strictures of Rules 55(c) and
60(b), along with the criteria set forth by this Court. Id. This Court reviews the trial court’s
grant or denial of a motion to set aside an entry of default or a default judgment for abuse of
discretion. Tatum v. Barrantine, 797 So. 2d 223, 227 (Miss. 2001). But if the trial court’s
decision was based on an error of law, then we will reverse. Green, 794 So. 2d at 173.
¶25. This Court has held that trial courts should not be grudging about setting aside a
default judgment when a proper showing has been made. Id. at 387-88. Because the law does
not favor default judgments, “where there is a reasonable doubt as to whether or not a default
judgment should be vacated, doubt should be resolved in favor of opening the judgment and
hearing the case on its merits.” Rogillio, 10 So. 3d at 467 (quoting McCain v. Dauzat, 791
So. 2d 839, 843 (Miss. 2001)). And, due to the importance of affording litigants a trial on the
merits, “any error made by a trial judge should be in the direction of setting aside a default
judgment and proceeding with trial.” Green, 794 So. 2d at 174. However, “it does not follow
that a party seeking relief from a default judgment is entitled to that relief as a matter of
right.” Rogillio, 10 So. 3d at 467 (quoting Pointer v. Huffman, 509 So. 2d 870, 875 (Miss.
1987)).
13
¶26. We have recognized an important distinction between the standard for setting aside
an entry of default and the standard for setting aside a default judgment, stating:
M.R.C.P. 55(c) draws a clear distinction between setting aside an entry of
default and setting aside a judgment of default. This Court has previously held
“there is a more liberal standard for setting aside a default than the standard for
setting aside a default judgment.” King v. Sigrest, 641 So. 2d 1158, 1162
(Miss. 1994). Therefore, in accordance with M.R.C.P. 55(c) the trial court [is]
permitted to set aside the entry of default for good cause shown. See Tatum [v.
Barrentine], 797 So. 2d [223,] 226 [Miss. 2001].
“‘[G]ood cause shown’ . . . requires the moving party to provide an
explanation for the default or give reasons why vacation of the default entry
would serve the interests of justice.” Allstate Ins. Co. v. Green, 794 So. 2d
170, 179 (Miss. 2001) (Waller, J., concurring) (citing 10A Charles Alan
Wright, Arthur R. Miller & Mary Kay Kane, Federal Practice and Procedure
§ 2696 at 141-42; 143-49 (3d ed.1998) (footnotes omitted)).
Windmon v. Marshall, 926 So. 2d 867, 871 (Miss. 2006).
¶27. “Any of the reasons sufficient to justify the vacation of a default judgment under Rule
60(b) normally will justify relief from a default entry and in various situations a default entry
may be set aside for reasons that would not be enough to open a default judgment . . . .”
Green, 794 So. 2d at 179 (Waller, J., concurring (quoting 10A Charles Alan Wright, Arthur
R. Miller, Federal Practice and Procedure §2696 (3d ed. 1998)). Thus, when considering
whether the trial court abused its discretion by failing to set aside an entry of default, the
Court considers the nature and legitimacy of the explanation for the default, whether there
is a colorable defense to the claim, and the extent of prejudice to the plaintiff if the default
is set aside. King v. Sigrest, 641 So. 2d 1158, 1162 (Miss. 1994) (quoting Williams v.
Kilgore, 618 So. 2d 51, 55 (Miss.1992)). When reviewing the trial court’s refusal to set aside
14
an entry of default, the Court applies a more liberal standard to its consideration of these
factors than it applies when reviewing a default judgment. Windmon, 926 So. 2d at 871.
¶28. Tucker argues that the trial court abused its discretion by refusing to set aside the entry
of default. As an initial matter, we observe that, after the default judgment was entered,
Tucker did not file a Rule 60(b) motion to set aside the default judgment. Such a motion was
not required, as Tucker preserved his challenge to the entry of default for appeal by filing a
motion to set it aside. An order denying a motion to set aside a default, like any other
interlocutory order, may be reviewed on appeal from a final judgment. Madsen v. Bumb, 419
F.2d 4, 5-6 (9th Cir. 1969). Because the entry of default is a prerequisite to the trial court’s
ability to enter a default judgment, an appellate finding that an entry of default should have
been set aside means that the defendant is entitled to relief from the default judgment. See
Green, 794 So. 2d at 174 (holding that, in an appeal from a default judgment, the circuit
court’s error in refusing to set aside the entry of default entitled the defendant to relief from
the default judgment).
¶29. We turn to the trial court’s finding that Tucker had failed to show good cause to set
aside the entry of default. As discussed above, Rule 55(c) provides that an entry of default
may be set aside “[f]or good cause shown.” M.R.C.P. 55(c). “Good cause” has been defined
as a bona fide excuse for failing to answer in a timely manner. Pittman, 501 So. 2d at 388.
The Williamses argue that, without a bona fide excuse for the failure to respond to the
complaint, a defaulting party is entitled to no relief from an entry of default. As discussed
above, this Court has not interpreted the “good cause” requirement of Rule 55(c) so
15
narrowly. Rather, we have held that a default entry may be vacated for good cause or in the
interests of justice, and that the same three factors considered under Rule 60(b) are relevant
to a consideration of whether to set aside an entry of default. Windmon, 926 So. 2d at 871;
King, 641 So. 2d at 1162. In Green, the Court held that an entry of default should have been
set aside due to the existence of a colorable defense even though the defendant failed to
present a persuasive reason for its failure to answer. Green, 794 So. 2d at 174. In fact, it
would be senseless to require a defaulting party to provide an excuse for the default to justify
setting aside an entry of default, but to require no such excuse under the higher standard for
setting aside a default judgment, in which a defaulting party may prevail upon a strong
showing of a colorable defense and lack of prejudice. See, e.g., Woodruff v. Thames, 143
So. 3d 546, 556 (Miss. 2014) (reversing a default judgment where the colorable defense and
prejudice factors favored the defaulting party, although that party had provided no persuasive
excuse for the default). We proceed to review the trial court’s findings under the three
relevant factors.
A. Nature and Legitimacy of the Defendant’s Reasons for the Default
¶30. Tucker argues that, because his federal lawsuit against Gay St. Mary Williams had
been settled, when he received the Williamses’ complaint in the present case, he did not
realize he had been sued and, for that reason, he did not forward the “paperwork” to his
insurer. He argues that his confusion should have excused the default. At the hearings on the
motion to set aside the entry of default and the motion for reconsideration, Tucker’s counsel
provided no explanation for Tucker’s failure to respond. Instead, Tucker argued that the entry
16
of default should be set aside because he had colorable defenses to the Williamses’ action
and because the Williamses would not experience prejudice if the default entry were set
aside. Tucker did present an affidavit to the trial court attached to his motion for
reconsideration stating the following:
On February 12, 2011[,] I received paperwork from the office of Chuck
McRae.
Upon seeing the paperwork, I understood it to be a request for my statement
because Ms. Williams was suing her insurer.
I called my insurance agent, Janet Howell, and informed her that Mr. McRae’s
office had contacted me. She said she would contact Mr. McRae regarding the
matter. I did not send the paperwork to my agent.
At the time the paperwork was delivered to me, I was not aware that I was a
defendant in the present lawsuit.
¶31. On appeal, Tucker contends that, because he settled his lawsuit with Gay St. Mary
Williams, he was justified in believing that his dispute with her was “over for good,” leading
to his misapprehension of the import of the summons and complaint. He cites Pittman, in
which the Court found that the defendant’s failure to answer was not justified by his
confusion over whether or not he had insurance. Pittman, 501 So. 2d at 388. Tucker points
to language in Pittman stating that, if the defendant had been confused over “the meaning
and effect of the papers served upon him” or confused about “the fact that he had been sued
and should respond,” those circumstances could support a finding of good cause for the
failure to respond. This Court also indicated in Rogillio that a defendant’s claim that he “did
not recognize or understand the import of a summons and complaint” may constitute good
cause. Rogillio, 10 So. 3d at 469.
17
¶32. Because Tucker failed to present these arguments to the trial court, the trial court did
not abuse its discretion by finding that he had failed to provide an excuse for the default. That
Tucker was confused about the import of the summons and complaint due to the settlement
of the prior federal lawsuit was not apparent from the averments in his affidavit. Tucker did
not mention the federal lawsuit in his affidavit. When the trial court asked Tucker’s counsel
at the hearings about his client’s explanation for his failure to answer, counsel responded that
there was no explanation. Instead, counsel asserted that Tucker’s colorable defenses and the
lack of prejudice to the Williamses justified setting aside the default entry. Under these
circumstances, even under this Court’s liberal standard applicable to setting aside an entry
of default, the trial court did not abuse its discretion by rejecting Tucker’s reason for the
default.
B. Colorable Defenses
¶33. A review of Tucker’s motions, the hearing transcripts, and the trial court’s orders in
this case indicates that the trial court did not consider Tucker’s arguments on colorable
defense and prejudice. Instead, when Tucker offered no excuse for the default, the trial court
deemed that sufficient for its denial of relief from the default entry. This Court has
established that the existence of a colorable defense and the degree of prejudice to the
opposing party are relevant considerations when a trial court is addressing a motion to set
aside an entry of default. King, 641 So. 2d at 1162. Therefore, the trial court erred by failing
to consider Tucker’s showing of colorable defenses. Although the record establishes that the
trial court erroneously failed to consider this factor, we find that it clearly weighed in favor
18
of Tucker. See Woodruff, 143 So. 3d at 556 (although the trial court erred by failing to
consider prejudice, the Court weighed the prejudice prong and concluded that it favored
setting aside a default judgment).
¶34. “The second prong of the balancing test asks whether the defendant has a colorable
defense to the merits of the plaintiff’s claim.” Rogillio, 10 So. 3d at 469. This Court has
stated that “[i]f any one of the three factors in the balancing test outweighs the other in
importance, this is the one.” Id. (quoting Bailey v. Georgia Cotton Goods Co., 543 So. 2d
180, 182 (Miss. 1989)). The Court has “encouraged our trial courts to vacate default
judgments where the defendant has shown that he has a meritorious defense on the merits.”
Bailey, 543 So. 2d at 182.
¶35. “‘Colorable’ is defined as ‘appearing to be true, valid, or right’” Woodruff, 143 So.
3d at 553 (quoting Black’s Law Dictionary 282 (8th ed. 2004) (emphasis added)). A
colorable defense is one that reasonably may be asserted, given the facts of the case and the
current law. Woodruff, 143 So. 3d at 553. A defense need not be compelling, be proven to
trial standards, or be supported by sworn evidence in order to qualify as a “colorable
defense.” Id. Rather, the defense must be a reasonable one. Id. “Indeed, this Court has held
that even a defense of ‘questionable’ strength may be colorable.” Id. (citing Rogillio, 10 So.
3d at 471).
¶36. Tucker argues that he presented two colorable defenses: (1) that the Williamses’
action against Tucker is barred by res judicata, because Gay St. Mary Williams’s claims were
compulsory counterclaims that she had not raised in Tucker’s federal lawsuit against her, and
19
(2) the accident reconstruction report produced in the federal action and submitted to the trial
court in this action established that Williams was wholly at fault in the accident.
¶37. We begin with Tucker’s res judicata/compulsory counterclaim defense to determine
whether it was one that reasonably could be asserted, keeping in mind that even a defense of
questionable strength may be colorable. The question of whether a claim was required to be
raised as a compulsory counterclaim in a case pending in federal court is governed by Federal
Rule of Civil Procedure 13(a). Tyler Marine Servs., Inc. v. Aqua Yacht Harbor Corp., 920
So. 2d 493, 496 (Miss. Ct. App. 2006). Federal Rule of Civil Procedure 13(a) provides:
(a) Compulsory Counterclaim.
(1) In General. A pleading must state as a counterclaim any claim that – at the
time of its service – the pleader has against an opposing party if the claim:
(A) arises out of the transaction or occurrence that is the subject matter of the
opposing party’s claim; and
(B) does not require adding another party over whom the court cannot acquire
jurisdiction.
(2) Exceptions. The pleader need not state the claim if:
(A) when the action was commenced, the claim was the subject of another
pending action; or
(B) the opposing party sued on its claim by attachment or other process that
did not establish personal jurisdiction over the pleader on that claim, and the
pleader does not assert any counterclaim under this rule.
F.R.C.P. 13(a). Under both the Federal Rules of Civil Procedure and the Mississippi Rules
of Civil Procedure, a compulsory counterclaim is “any claim which at the time of serving the
pleading the pleader has against any opposing party, if it arises out of the transaction or
20
occurrence that is the subject matter of the opposing party’s claim.” Reid ex rel. Reid v. Am.
Premier Ins. Co., 814 So. 2d 141, 146 (2002). “A counterclaim which is compulsory but is
not brought is thereafter barred” by res judicata. McDaniel v. Anheuser-Busch, Inc., 987
F.2d 298, 304 (5th Cir. 1993) (quoting Baker v. Gold Seal Liquors, Inc., 417 U.S. 467, 469
n.1, 94 S. Ct. 2504, 2506 41 L. Ed. 2d 243 (1974)).
¶38. Under the rules employed by the Fifth Circuit Court of Appeals for determining
whether a counterclaim is compulsory, a court should ask:
(1) whether the issues of fact and law raised by the claim and counterclaim
largely are the same; (2) whether res judicata would bar a subsequent suit on
defendant’s claim absent the compulsory counterclaim rule; (3) whether
substantially the same evidence will support or refute plaintiff’s claim as well
as defendant’s counterclaim; and (4) whether there is any logical relationship
between the claim and the counterclaim.
Tank Insulation Int’l, Inc. v. Insultherm, Inc., 104 F.3d 83, 85-86 (5th Cir. 1997). If any
one of these tests is satisfied, the counterclaim is compulsory. Id. It is easy to deduce that the
Williamses’ claims against Tucker arise from the same transaction or occurrence as Tucker’s
federal court lawsuit against Gay St. Mary Williams. Both cases are based on the same
accident, and the same evidence would be relevant to both lawsuits. Because both lawsuits
require a determination of which party was at fault for the accident, the issues of fact and law
are largely the same. An undeniable logical relationship exists between the claims in
question. A logical relationship “exists when the claim and the counterclaim arise from the
same ‘aggregate of operative facts,’ or ‘the aggregate core of facts upon which the original
claim rests activates additional rights, otherwise dormant, in the defendants.’” N. Cypress
Med. Ctr. Operating Co. Ltd. v. Cigna Healthcare, 781 F.3d 182, 205 n.145 (5th Cir. 2015).
21
¶39. The Williamses argue that, even if their claims were compulsory counterclaims that
should have been raised in the federal case, the settlement of the federal case had no res
judicata effect upon the claims because the settlement was not intended to preclude Gay St.
Mary Williams’s claims against Tucker. Res judicata bars claims that were raised or should
have been decided in the prior litigation. Reid, 814 So. 2d at 145. The elements of res
judicata are: (1) “identity of the subject matter of the original action when compared with the
action now sought to be precluded;” (2) “identity of underlying facts and circumstances upon
which a claim is asserted and relief sought in the two actions;” (3) “identity of the parties to
the two actions, an identity met where a party to the one action was in privity with a party to
the other;” and (4) “identity of the quality or character of a person against whom the claim
is made.” Id. (citing Dunaway v. W.H. Hopper & Assocs., Inc., 422 So. 2d 749, 751 (Miss.
1982)). Res judicata requires an express or implied adjudication on the merits. Liberto v.
D.F. Stauffer Biscuit Co., Inc., 441 F.3d 318, 328 (5th Cir. 2006).
¶40. The district court dismissed Tucker’s lawsuit with prejudice, “it appearing that the
entire cause has been compromised and settled between and among the parties.” It is true that
“there are circumstances where ‘a settlement agreement approved and embodied in a final
judgment of the court is entitled to full res judicata effect.’” Id. at 326. When the parties to
the settlement “objectively manifest an intent to cement their agreement with claim
preclusion,” then a settlement agreement will be given res judicata effect. Id.
¶41. The settlement agreement in the Williamses’ federal lawsuit states the following
regarding the res judicata effect of the settlement:
22
IT IS EXPRESSLY UNDERSTOOD, PROMISED, AGREED AND
COVENANTED by the undersigned that the payment aforesaid made by Gay
St. Mary Williams’ insurance carrier on her behalf is not intended to be and
should not be construed as an admission of any liability for the matters
claimed, but that the said payment is made by way of compromise and
settlement only of certain Claims mentioned above, for which liability is
expressly denied by the aforementioned Payors and released parties and that
this release is intended only to operate as a release of whatever Claims the
undersigned may have against Payors. Any claims or causes of action by Gay
St. Mary Williams are specifically reserved and not waived.
The Williamses argue that, because the settlement agreement specifically reserved “any
claims or causes of action by Gay St. Mary Williams,” the district court’s judgment of
dismissal with prejudice had no res judicata effect on the Williamses’ claims. See Matter of
W. Texas Mktg. Corp., 12 F.3d 497, 501 (5th Cir. 1994) (stating that “‘[e]xpress agreement’
between the parties that litigation of one part of a claim will not preclude a second suit on
another part of the same claim is normally honored by the courts”).
¶42. But persuasive authority is to the effect that, because the district court’s judgment did
not expressly incorporate the settlement agreement, that agreement was not “embodied in a
final judgment of the court,” and its language has no effect on res judicata analysis. See
Oreck, LLC v. Dyson, Inc., 560 F.3d 398, 402 (5th Cir. 2009). In Oreck, the Fifth Circuit
Court of Appeals examined the preclusive effect of a district court judgment entered after a
case had settled. Id. at 400. As in this case, the final judgment simply dismissed the case
without prejudice and did not incorporate the settlement agreement. Id. Because the
settlement agreement was not incorporated into the judgment, the Fifth Circuit concluded that
the intent the parties had expressed in the settlement agreement as to claim preclusive effect
of the settlement did not control the res judicata analysis. Id. at 402. Thus, the Fifth Circuit
23
held that, instead of looking to the parties’ agreement as to which future claims would be
barred by the settlement, the district court properly resolved that question by applying the
transaction test. Id. at 403. In this case, because the Williamses’ claims likely were
compulsory counterclaims in the prior federal lawsuit and the settlement agreement was not
incorporated into the district court’s judgment of dismissal with prejudice, Tucker has
presented a reasonable, colorable defense on the merits that the Williamses’ lawsuit was
barred by res judicata. While we do not now pass upon the ultimate efficacy of Tucker’s res
judicata defense, it is, nevertheless – at this stage – colorable.
¶43. Tucker argues that a second colorable defense was established by the accident
reconstruction report, produced in the federal court action, which opined that Williams was
wholly at fault for the accident. The Williamses’s claims against Tucker all were based on
the theory that Tucker’s negligence had caused the accident in which Gay St. Mary Williams
had been injured. The Williamses were required to prove, by a preponderance of the
evidence, the elements of duty, breach, causation, and injury. Gulledge v. Shaw, 880 So. 2d
288, 293 (Miss. 2004). In other words, the Williamses were required to show it was more
probable than not that Tucker had breached his duty of reasonable care, which proximately
had caused the accident and Gay St. Mary Williams’s injuries. The accident reconstruction
report to the effect that Gay St. Mary Williams, not Tucker, was wholly at fault for the
accident tended to negate the elements of breach and causation. We find that the accident
reconstruction report is sufficient to establish that Tucker has a second colorable defense to
the Williamses’ claims.
24
¶44. The Williamses argue that, because the accident reconstruction report was not sworn,
it cannot be used to substantiate Tucker’s defense. In Capital One Services, Inc. v. Rawls,
904 So. 2d 1010, 1016 (Miss. 2004), and Rush v. North American Van Lines, Inc., 608 So.
2d 1205, 1210 (Miss. 1992), this Court held that an affidavit or other sworn evidence was
required to show a colorable defense. However, these cases were overruled by BB Buggies,
Inc. v. Leon, 150 So. 3d 90, 103 (Miss. 2014), which held that the strict requirement of
sworn evidence applicable to summary judgment is not applicable to the more lenient
standard for setting aside a default judgment. Id. Therefore, the accident reconstruction
report was competent evidence in support of the existence of a colorable defense for the
purpose of setting aside the entry of default.
¶45. We find that Tucker has presented two colorable defenses to the allegations in
Williams’s complaint.6 First, Tucker has shown that the Williamses’ action may be barred
by res judicata. Second, Tucker has produced an accident reconstruction report to the effect
that he was not negligent because Gay St. Mary Williams, not Tucker, was at fault for the
accident. The colorable defense factor weighs in Tucker’s favor.
C. Extent of Prejudice to the Williamses if the Default is Set Aside
¶46. Because this Court has established that the extent of prejudice to the opposing party
is a relevant consideration when ruling on a motion to set aside an entry of default, the trial
court erred by failing to consider Tucker’s argument that the Williamses would suffer little
6
Because the sole issue before this Court is whether the trial court abused its
discretion by failing to set aside the entry of default, our review is limited to whether Tucker
has presented colorable defenses on the merits. We do not adjudicate the merits of those
defenses at this time.
25
prejudice if the default were set aside. King, 641 So. 2d at 1162. “[T]he key inquiry in
determining whether a plaintiff has suffered prejudice by the setting aside of the default
judgment is the passage of time.” Stanford v. Parker, 822 So. 2d 886, 890 (Miss. 2002). This
Court explicitly has recognized that delay may be substantially prejudicial in cases involving
motor vehicle accidents due to the impact of the passage of time on “witnesses’ memories
regarding a split second event,” and the fact that evidence may be lost over time. Pittman,
501 So. 2d at 388. It also is a valid consideration that a severely injured plaintiff would suffer
ongoing emotional and financial distress due to the delay in resolving the case. Rogillio, 10
So. 3d at 472. However, the plaintiff’s need to litigate the claims in the event a default
judgment is set aside is not grounds for a finding of prejudice. BB Buggies, 150 So. 3d at
104. “Prejudice does not result from ‘the loss of rights that were obtainable only by default.’”
Id. (quoting In re Estates of Gates, 876 So. 2d 1059, 1065 (Miss. Ct. App. 2004)).
¶47. The Williamses filed their circuit court complaint on February 4, 2010, and Tucker
was served with process on March 3, 2010. Tucker’s answer was due within thirty days but
was not forthcoming. M.R.C.P. 12(a). On June 15, 2010, the Williamses filed their
application for the entry of default, and the default was entered the same day. Tucker filed
the motion to set aside, with his answer attached, dated November 5, 2010. Thus, Tucker did
not file his answer until approximately seven months after it was due. The trial court denied
the motion to set aside the default entry on July 1, 2011, and denied Tucker’s motion for
reconsideration on November 10, 2011.
26
¶48. The Williamses argue that they would suffer prejudice from setting aside the default
due to their ongoing financial and emotional distress attributable to Gay St. Mary Williams’s
injuries. They also point to this Court’s recognition that delay in a motor vehicle accident
case may be prejudicial due to faded witness memories and lost evidence. Tucker responds
that Gay St. Mary Williams’s medical expenses were covered by worker’s compensation, and
she received an additional $500,000 from a workers’ compensation settlement. Tucker also
points out that the Williamses did not file their complaint until one day before the expiration
of the three-year statute of limitations, and they did not move to set the damages hearing until
March 28, 2013.
¶49. Because this Court is reviewing the propriety of the trial court’s refusal to set aside
the entry of default, we review the evidence and arguments concerning prejudice that were
before the trial court at the time that it ruled on Tucker’s motions. At that time, Tucker
argued that the Williamses had not been prejudiced by his delayed answer because the
Williamses still were litigating the case against the two insurers. As stated, Tucker’s answer
was filed seven months late. At that time, discovery was ongoing and no summary judgment
motions had been filed. The trial court’s rulings denying relief to Tucker were filed several
months later.
¶50. In BB Buggies, this Court held that delays similar to those in this case were
prejudicial under the stricter standard applicable to setting aside a default judgment,
reasoning:
Less than four months from commencement of the action to resolution on the
motion to set aside the default judgment – with only eight days between entry
27
of the default judgment and the motion to set aside – is a very short amount of
time compared to the time lapse in cases where we have found that the delay
caused by the defendants was prejudicial to the plaintiffs. See Kumar [v.
Loper], 80 So. 3d 808 [(Miss. 2012)] (complaint filed and served December
9, 2008; default judgment entered February 24, 2009; damages awarded June
11, 2009; and motion to set aside filed June 17, 2009, four months after default
judgment was entered); Rogillio, 10 So. 3d 463 (more than a month elapsed
from date default judgment entered until motion to set aside filed, and more
than fourteen months elapsed from time complaint was filed and served until
motion to set aside default judgment was denied); Stanford v. Parker, 822 So.
2d 886 (Miss. 2002) (fourteen months from time defendants were served until
resolution on motion to set aside default judgment; motion to set aside filed
nearly a year after default judgment entered); Guar. Nat’l Ins. Co. [v.
Pittman], 501 So. 2d [371,] 377 [(Miss. 2010)] (motion to set aside filed four
months after default judgment entered; motion to set aside denied thirteen
months after complaint was filed and served).
BB Buggies, Inc. v. Leon, 150 So. 3d 90, 104-05 (Miss. 2014).
¶51. A more liberal standard is applicable to setting aside an entry of default. Windmon,
926 So. 2d at 871. Setting aside a default entry “requires the moving party to provide an
explanation for the default or give reasons why vacation of the default entry would serve the
interests of justice.” Id. An entry of default may be set aside upon a showing of a colorable
defense, without more. Green, 794 So. 2d at 174. Doubts should be resolved in favor of
“opening the judgment and hearing the case on its merits.” Rogillio, 10 So. 3d at 467
(quoting McCain v. Dauzat, 791 So. 2d 839, 843 (Miss. 2001)). We hold that, considering
the liberal standard applicable to a motion to set aside an entry of default, the Williamses’
presentation of two colorable defenses, and the limited prejudice that the Williamses would
have suffered if the trial court had set aside the entry of default, the trial court abused its
discretion by refusing to set aside the entry of default. We reverse the default judgment and
remand this case for further proceedings.
28
CONCLUSION
¶52. The trial court erred by failing to consider Tucker’s two colorable defenses on the
merits of the Williamses’ claims and the degree of prejudice to the Williamses if the default
entry were set aside. Due to Tucker’s presentation of strong colorable defenses and the
limited prejudice to the Williamses, we hold that the trial court abused its discretion by
failing to set aside the default entry. The judgment of the Circuit Court of Hinds County,
First Judicial District, is reversed, and this case is remanded for further proceedings.
¶53. REVERSED AND REMANDED.
WALLER, C.J., DICKINSON, P.J., KING, COLEMAN AND MAXWELL, JJ.,
CONCUR. RANDOLPH, P.J., CONCURS IN PART AND IN RESULT WITH
SEPARATE WRITTEN OPINION JOINED BY LAMAR AND BEAM, JJ.
RANDOLPH, PRESIDING JUSTICE, CONCURRING IN PART AND IN
RESULT:
¶54. While I agree this matter should be reversed and remanded, my analysis would
conclude at a finding that the Williamses’ claims against Tucker are barred by res judicata,
for those claims were compulsory counterclaims that should have been asserted in the federal
action filed by Tucker. Fed. R. Civ. P. 13(a). The purpose of Rule 13(a) is to provide
complete resolution to all claims between parties that “arise[] out of the transaction or
occurrence that is the subject matter of the opposing party’s claim,” avoiding unnecessary
litigation and expenditure of judicial resources. Id. See also Plant v. Blazer Fin. Servs., Inc.
of Georgia, 598 F.2d 1357, 1364 (5th Cir. 1979). This purpose would be frustrated if the
courts did not enforce the rules concerning compulsory counterclaims as intended.
LAMAR AND BEAM, JJ., JOIN THIS OPINION.
29