IN THE SUPREME COURT OF TENNESSEE
AT NASHVILLE
February 5, 2003 Session
VICTORIA L. HENRY, ET AL. v. TIMOTHY A. GOINS, ET AL.
Appeal by Permission from the Court of Appeals
Circuit Court for Davidson County
No. 97C-496 (99C-1453, 99C-1454) Hamilton V. Gayden, Jr., Judge
No. M2000-02663-SC-R11-CV - Filed May 13, 2003
The trial court entered an Order of Dismissal for failure to prosecute. The order was entered with
prejudice and without notice to the parties. After the trial court reinstated Plaintiffs’ claims pursuant
to Rule 60.02 of the Tennessee Rules of Civil Procedure (“Rule 60.02”), Plaintiffs prevailed on the
merits. The Court of Appeals held that the trial court erred in setting aside the Order of Dismissal
and vacated the judgment in Plaintiffs’ favor. We granted permission to appeal. Because Plaintiffs
presented adequate grounds for relief under Rule 60.02, we hold that the trial court did not abuse its
discretion in reinstating their claims. Therefore, we reverse that portion of the judgment of the Court
of Appeals holding that the trial court erred in setting aside the Order of Dismissal. Accordingly,
we reinstate the jury verdict, and we remand this cause to the trial court for proceedings consistent
with this opinion.
Tenn. R. App. P. 11 Appeal by Permission; Judgment of the Court of Appeals Reversed in
Part and Affirmed in Part; Case Remanded
JANICE M. HOLDER, J., delivered the opinion of the court, in which FRANK F. DROWOTA , III, C.J.,
and E. RILEY ANDERSON, ADOLPHO A. BIRCH, JR., and WILLIAM M. BARKER, JJ., joined.
Robert L. Whitaker, Nashville, Tennessee, for the plaintiffs-appellants, Victoria L. Henry and Peggy
Henry.
Paul M. Buchanan and Julie Bhattacharya Peak, Nashville, Tennessee, for the defendants-appellees,
Jason M. Pope and Neal H. Dobyns d/b/a Residue Rescue.
Eugene N. Bulso, Jr. and Julie Murphy Burnstein, Nashville, Tennessee, for the plaintiffs-appellees,
Robert Orr-Sysco Food Services Company and Timothy A. Goins.
OPINION
I. Factual and Procedural Background
This case arose out of a traffic accident that occurred on November 18, 1996. Three vehicles
were involved: a Ford Escort operated by Victoria L. Henry, in which Peggy Henry was a passenger;
a tractor-trailer operated by Timothy A. Goins and owned by Robert Orr-Sysco Food Systems Co.
(“Robert Orr-Sysco”); and a tractor-trailer operated by Jason M. Pope and owned by Neil H. Dobyns
d/b/a Residue Rescue. Victoria and Peggy Henry filed a complaint in the Circuit Court for Davidson
County, Tennessee, seeking recovery for personal injuries against Robert Orr-Sysco, Mr. Goins, Mr.
Pope, and Mr. Dobyns. Mr. Goins and Robert Orr-Sysco filed a cross-complaint against Mr. Pope
and Mr. Dobyns, seeking recovery for damages resulting from the same accident.
The case had been pending for approximately fourteen months when Judge Walter Kurtz, on
April 20, 1998, dismissed the case for failure to prosecute. The dismissal was in accordance with
Rule 37.02 of the Local Rules of Practice of the Courts of Record of Davidson County.1 No prior
notice was given to the parties that the trial court was contemplating such an action, and no hearing
was held prior to the dismissal. The dismissal was with prejudice because the order failed to provide
otherwise. See Tenn. R. Civ. P. 41.02(3) (stating that an involuntary dismissal for failure to
prosecute “operates as an adjudication upon the merits” unless the trial court otherwise directs).
On May 19, 1998, cross-plaintiff Goins moved to set aside the trial court’s dismissal of “the
case.” Mr. Goins asserted that the judgment should be set aside because he was never notified that
the court had contemplated dismissal. The trial court heard argument on Mr. Goins’ motion on June
5, 1998. The motion was unopposed. On June 16, 1998, Judge Kurtz entered an order limiting
reinstatement of the case to Mr. Goins’ claims against Mr. Pope and Mr. Dobyns.
On June 15, 1998, upon learning that the Order to Set Aside Dismissal would not apply to
all of the plaintiffs, counsel for the Henrys filed a separate motion to set aside the dismissal. The
defendants opposed the motion. The Henrys argued that their counsel of record was never notified
that the court was contemplating dismissal and that a paralegal employed by their counsel
“inadvertently misread the Motion [of Mr. Goins], assuming it to have been filed on behalf of all
plaintiffs.” As to the merits of the dismissal for failure to prosecute, the Henrys submitted an
affidavit from their counsel stating that the parties had been actively negotiating alternative dispute
resolution as a means of resolving the case.
1
In 1997, Rule 37.02 of the Local Rules of Practice of the Courts of Record of Davidson County read, “To
expedite cases, the court may take reasonable measures to purge the docket of old case s. The P residing Judge, with the
concurrence of the judges or chancellors affected, may make such necessary orders and take such actions as are required
to see that the dockets are uniform ly purged.” Rule 37.01 (1997) provided that “[a]ll civil cases must be concluded or
set for trial within twelve months from date of filing unless the court has directed a shorter or longer period for specific
cases. These time standards will be implemented by appropriate orders from the court.”
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Judge Kurtz heard argument on the Henrys’ motion to set aside the dismissal on July 17,
1998, and granted their motion for relief pursuant to Rule 60.02 of the Tennessee Rules of Civil
Procedure (“Rule 60.02”) on August 27, 1998. Robert Orr-Sysco requested an interlocutory appeal
of the order reinstating the Henrys’ claims. Permission to appeal was denied. The case was set for
trial before Judge Hamilton Gayden, and the Henrys prevailed on the merits. Robert Orr-Sysco
appealed.
The Court of Appeals held that under Rule 60.02 “the conduct of the paralegal cannot be
treated as excusable neglect.” On this basis, the Court of Appeals reversed the trial court’s
reinstatement of the Henrys’ claims and vacated the judgment in their favor. We granted permission
to appeal. For the following reasons, we reverse the Court of Appeals’ holding that the trial court
erred in setting aside the Order of Dismissal, and we reinstate the jury verdict.
II. Standard of Review
In reviewing a trial court’s decision to grant or deny relief pursuant to Rule 60.02, we give
great deference to the trial court. See Underwood v. Zurich Ins. Co., 854 S.W.2d 94, 97 (Tenn.
1993). Consequently, we will not set aside the trial court’s ruling unless the trial court has abused
its discretion. See id. An abuse of discretion is found only when a trial court has “‘applied an
incorrect legal standard, or reached a decision which is against logic or reasoning that caused an
injustice to the party complaining.’” State v. Stevens, 78 S.W.3d 817, 832 (Tenn. 2002) (quoting
State v. Shuck, 953 S.W.2d 662, 669 (Tenn. 1997)). The abuse of discretion standard does not
permit an appellate court to merely substitute its judgment for that of the trial court. See Eldridge
v. Eldridge, 42 S.W.3d 82, 85 (Tenn. 2001).
III. Analysis
Rule 59.04 of the Tennessee Rules of Civil Procedure provides that a motion to alter or
amend a judgment must be filed within thirty days of the entry of the judgment in question. Because
the Henrys did not file a motion to set aside the dismissal of their claims within thirty days after the
Order of Dismissal was entered, their sole avenue for relief from the dismissal of their claims
became a motion in accordance with Rule 60.02. Rule 60.02 provides relief from final judgments
as follows:
On motion and upon such terms as are just, the court may relieve a
party or the party's legal representative from a final judgment, order
or proceeding for the following reasons: (1) mistake, inadvertence,
surprise or excusable neglect; (2) fraud (whether heretofore
denominated intrinsic or extrinsic), misrepresentation, or other
misconduct of an adverse party; (3) the judgment is void; (4) 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 a judgment should have
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prospective application; or (5) any other reason justifying relief from
the operation of the judgment. The motion shall be made within a
reasonable time, and for reasons (1) and (2) not more than one year
after the judgment, order or proceeding was entered or taken.
It is clear from the content of the Henrys’ Motion to Set Aside Dismissal that they sought
relief pursuant to Rule 60.02, even though the motion did not mention this rule. Moreover, the trial
court considered the Henrys’ motion as a motion pursuant to Rule 60.02. Because the Henrys’
request for relief did not mention Rule 60.02, they also failed to specify the section of the rule upon
which they were relying. It is apparent, however, that the Henrys sought relief from final judgment
under Rule 60.02(1).
“[M]istake, inadvertence, surprise or excusable neglect” is a ground for relief from a final
judgment under Rule 60.02(1). Among other reasons for relief, the Henrys alleged that the
“excusable neglect and inadvertent mistake” of a paralegal employed by their counsel caused them
to fail to join the Motion to Set Aside Dismissal filed by Mr. Goins. In an affidavit, the paralegal
stated that she “inadvertently misread the Motion [of Mr. Goins], assuming it to have been filed on
behalf of all plaintiffs.” The Court of Appeals held that the paralegal’s conduct was not a sufficient
basis for post-judgment relief. We agree that the paralegal’s conduct in this case does not provide
grounds for relief.
Although Rule 59.04 and Rule 60.02 are distinct, there is considerable overlap between them.
In this case, the grounds that Mr. Goins successfully asserted in support of post-judgment relief were
essentially the same grounds upon which the Henrys relied in seeking relief. Both Mr. Goins and
the Henrys argued that their claims should be reinstated because they were never notified that the
trial court was contemplating dismissal. The motions of Mr. Goins and the Henrys requesting
reinstatement of their claims were appropriately construed as motions pursuant to Rule 59.04 and
Rule 60.02, respectively, according to the time when the motions were filed. That the Henrys’
motion would be untimely under Rule 59.04 is of no consequence if they meet the requirements for
relief under Rule 60.02(1).
Under Rule 60.02(1), the Henrys’ request for relief must be evaluated to determine whether
the court may “relieve [them] from a final judgment.” The final judgment in this case was the Order
of Dismissal that was entered without notice. As relief under Rule 60.02 is available “from a final
judgment” (emphasis added), generally speaking, the grounds for relief asserted under Rule 60.02(1)
must have occurred at or before the entry of the final judgment and must have resulted in the
judgment’s entry. Tenn. R. Civ. P. 60.02; see also Thomas M. McInnis & Assocs., Inc. v. Hall, 349
S.E.2d 552, 555 (N.C. 1986) (construing a rule identical to Rule 60.02(1) and observing that
excusable neglect must have occurred at or before entry of the judgment and must have caused it to
be entered). The final judgment from which the Henrys seek relief under Rule 60.02(1) obviously
did not result from any “excusable neglect and inadvertent mistake” on the part of the paralegal
because the paralegal’s conduct occurred subsequent to the entry of the Order of Dismissal. What
occurred after the entry of the Order of Dismissal should not have been considered in determining
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whether relief pursuant to Rule 60.02(1) was justified, except as it might relate to whether the
Henrys’ Motion to Set Aside Dismissal was made within a reasonable time.2 See, e.g., Norton v.
Sawyer, 30 S.E 2d 148, 152 (N.C. App. 1976). Thus, even if the Henrys’ failure to file a motion
pursuant to Rule 59.04 were the product of the paralegal’s “mistake, inadvertence, surprise or
excusable neglect,” such conduct would not provide grounds for relief under Rule 60.02(1).
Although the paralegal’s conduct is not a basis for relief from the Order of Dismissal, the
Henrys’ Motion to Set Aside Dismissal sets forth other circumstances that may constitute excusable
neglect under Rule 60.02(1). In this case, the “mistake, inadvertence, surprise or excusable neglect”
upon which the Henrys properly relied in seeking relief is the “mistake, inadvertence, surprise or
excusable neglect” that resulted in the dismissal of their claims. When a party has no notice of a
critical step in a court proceeding, the circumstances may make out a case of excusable neglect. See,
e.g., Tenn. Dep’t of Human Serv. v. Barbee, 689 S.W.2d 863, 868 (Tenn. 1985) (holding that failure
of notice constitutes excusable neglect justifying relief from default judgment when combined with
other requirements for such relief); Jerkins v. McKinney, 533 S.W.2d 275, 281 (Tenn. 1976)
(holding that failure to notify counsel of entry of an order overruling motion for new trial constituted
excusable neglect justifying relief under Rule 60.02(1)). The entry of the Order of Dismissal was
a critical step in the Henrys’ lawsuit because the order disposed of the case as completely as a
judgment after a trial on the merits. In determining whether lack of notice of the impending
dismissal demonstrates excusable neglect in this case, we will look to cases that decide whether
default judgments should be set aside.
A dismissal for failure to prosecute is analogous to a default judgment. When a defendant
fails to answer a complaint, the plaintiff may obtain a default judgment without a hearing on the
merits. When a plaintiff fails to prosecute the case, the defendant may receive a judgment of
dismissal without a hearing on the merits. Both dismissals and default judgments are drastic
sanctions. See United Coin Meter Co. v. Seaboard Coastline R.R., 705 F.2d 839, 845 (6th Cir.
1983); Barish v. Metro. Gov’t of Nashville & Davidson County, Tenn., 627 S.W.2d 953, 955 (Tenn.
Ct. App. 1981). Neither dismissals nor default judgments are favored by the courts. See Barbee, 689
S.W.2d at 866; Mfrs. Consolidation Serv., Inc. v. Rodell, 42 S.W.3d 846, 864 (Tenn. Ct. App. 2000).
Dismissals based on procedural grounds like failure to prosecute and default judgments run counter
to the judicial system’s general objective of disposing of cases on the merits. See, e.g., Childress
v. Bennett, 816 S.W.2d 314, 316 (Tenn. 1991) (observing that “it is the general rule that courts are
reluctant to give effect to rules of procedure . . . which prevent a litigant from having a claim
adjudicated upon its merits”); Barbee, 689 S.W.2d at 866 (stating that in the interests of justice,
courts express a clear preference for a trial on the merits).
2
Under Rule 60 .02(1), a req uest for relief must be made within a reasonable time and not more than one year
after the ju dgm ent was entered. See Tenn. R. Civ. P. 60.02. The interval of time between the Order of Dismissal and
the Motion to Set A side D ismissal was approximately two months. W e conc lude that the H enrys’ motion under Rule
60.0 2(1) was timely.
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Rule 55.02 of the Tennessee Rules of Civil Procedure permits trial courts to set aside default
judgments in accordance with Rule 60.02. Courts construe requests for relief pursuant to Rule 60.02
much more liberally in cases involving default judgment than in cases following a trial on the merits.
See Barbee, 689 S.W.2d at 866; Nelson v. Simpson, 826 S.W.2d 483, 485 (Tenn. Ct. App. 1991).
A request to vacate a default judgment in accordance with Rule 60.02 should be granted if there is
reasonable doubt as to the justness of dismissing the case before it can be heard on its merits. See
Nelson, 826 S.W.2d at 486. A request to vacate an order of dismissal pursuant to Rule 60.02 should
be granted under the same circumstances. Such liberality is especially warranted when an order of
dismissal is entered with prejudice and without such procedural safeguards as notice, considering
that Rule 55.01 of the Tennessee Rules of Civil Procedure requires notice to be given before a
default judgment is granted.
Because of the similarity between default judgments and dismissals, we find instructive those
factors that are used to determine if a default judgment should be vacated under Rule 60.02(1).
Those factors include: (1) whether the default was willful; (2) whether the defendant has a
meritorious defense; and (3) whether the non-defaulting party would be prejudiced if relief were
granted. See Barbee, 689 S.W.2d at 866. These same factors should apply in cases when relief from
an order of dismissal is sought under Rule 60.02(1).
When a party seeks relief from a final judgment pursuant to Rule 60.02, the burden of proof
rests with that party. See Federated Ins. Co. v. Lethcoe, 18 S.W.3d 621, 624 (Tenn. 2000); Banks
v. Dement Constr. Co., 817 S.W.2d 16, 18 (Tenn. 1991). Furthermore, the party seeking relief must
offer proof of the basis upon which relief is sought. See Lethcoe, 18 S.W.3d at 624; Banks, 817
S.W.2d at 18. Our review of the record indicates that there was ample evidence before the trial court
to support its decision to reinstate the Henrys’ claims pursuant to Rule 60.02.
Turning to the first factor, the Henrys were not personally at fault for the sua sponte dismissal
of their claims. The trial court’s failure to provide notice that it was contemplating dismissal
precluded the Henrys from addressing the merits of the dismissal for failure to prosecute before the
final judgment was entered. In support of their Motion to Set Aside Dismissal, the Henrys submitted
proof that the parties had been actively negotiating toward settlement and that, contrary to the trial
court’s contention in its Order of Dismissal, the case had not actually been dormant for an extended
period of time. As to the second factor, it is clear that the Henrys had a meritorious claim. When
their claims were reinstated, the Henrys obtained a judgment in their favor. As to the third factor,
Robert Orr-Sysco did not assert any specific prejudice that would result if the Henrys’ claims were
reinstated. Simply having to proceed to trial does not constitute prejudice, nor does the mere passage
of time. See Barbee, 689 S.W.2d at 867; Nelson, 826 S.W.2d at 486. The application of these three
factors shows that the Henrys have demonstrated excusable neglect, a ground for relief pursuant to
Rule 60.02(1).
In the case before us, the trial court exercised its discretion by determining that the dismissal
should be vacated and that a hearing on the merits should be held. We have recognized that “the trial
court is in the best position to assess the various factors that should be considered in determining
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whether a default judgment should be vacated and its finding is entitled to great weight.” Barbee,
689 S.W.2d at 867. Similarly, we believe the trial court is in the best position to decide whether its
Order of Dismissal should be set aside. Although the “escape valve” of Rule 60.02 should not be
easily opened, we have recognized that the purpose of Rule 60.02 is to protect parties “‘from
possible inequity that might otherwise arise from the unrelenting imposition of finality imbedded in
our procedural rules.’” Toney v. Mueller Co., 810 S.W.2d 145, 146 (Tenn. 1991) (quoting
Thompson v. Firemen’s Fund Ins. Co., 798 S.W.2d 235, 238 (Tenn. 1990). In addition, this Court
has observed that the power to order sua sponte the involuntary dismissal of an action “must be
exercised most sparingly and with great care that the right of the respective parties to a hearing shall
not be denied or impaired.” Harris v. Baptist Mem’l Hosp., 574 S.W.2d 730, 731 (Tenn. 1978). Had
the trial court dismissed the case without prejudice, the parties could have moved to reinstate the
case or could have re-filed their claims within the time permitted by the savings statute. We
conclude that the trial court did not abuse its discretion in reinstating the Henrys’ claims because the
circumstances of this case create a reasonable, if not compelling, question of whether the dismissal
should be set aside. See Nelson, 826 S.W.2d at 486. The remainder of the issues raised by Robert
Orr-Sysco are without merit.
IV. Conclusion
Because the record shows that the Henrys presented adequate grounds for relief under Rule
60.02, we hold that the trial court did not abuse its discretion in reinstating the Henrys’ claims.
Therefore, we reverse that portion of the judgment of the Court of Appeals holding that the trial court
erred in setting aside the Order of Dismissal. The jury verdict is reinstated. The Henrys did not
appeal the Court of Appeals’ award of discretionary costs to Robert Orr-Sysco, and this award is
affirmed. The cause is remanded to the trial court for proceedings consistent with this opinion.
Costs of this appeal are taxed to Robert-Orr Sysco and its surety, for which execution may issue if
necessary.
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JANICE M. HOLDER, JUSTICE
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