Associates Asset Management, LLC b. Sheila Smith

11/03/2020
IN THE COURT OF APPEALS OF TENNESSEE
AT NASHVILLE
September 1, 2020 Session
ASSOCIATES ASSET MANAGEMENT, LLC V. SHEILA SMITH
Appeal from the Circuit Court for Robertson County
No. 2017-CV-338 Ross H. Hicks, Judge
No. M2019-02217-COA-R3-CV
The issue in this appeal is whether the defendant waived the court’s lack of personal
jurisdiction through insufficient service of process by making a general appearance. It is
undisputed that service of process on the defendant was insufficient when this case
commenced in the general sessions court. Nevertheless, the defendant’s counsel appeared
on behalf of the defendant in the general sessions court, and the court set a trial date. Prior
to a trial on the merits, the defendant filed a motion to dismiss the civil warrant premised
on insufficient service of process. The record does not include any ruling on that motion,
and the general sessions court transferred the case to the circuit court by agreement of the
parties before a trial on the merits. Shortly thereafter, the defendant filed her second motion
to dismiss the action based on insufficient service of process. The circuit court denied the
motion ruling that, although service of process was insufficient, the defendant waived the
issue by making a general appearance in general sessions court. The court entered a final
judgment in favor of the plaintiff for $35,667.42, and this appeal followed. In Tennessee,
a party makes a general appearance for the purposes of waiver by seeking affirmative action
from the court on an issue related to the merits of the dispute. See Landers v. Jones, 872
S.W.2d 674, 677 (Tenn. 1994); see also Tenn. Code Ann. § 16-15-505 (any issues related
to the general sessions court’s jurisdiction must be raised “before the hearing, or they will
be considered as waived.”). There is nothing in the record indicating that the defendant
sought affirmative action from the court on an issue related to the merits of the dispute in
the general sessions court prior to filing her motion to dismiss. Further, the record shows
that the defendant promptly filed another motion to dismiss on the same ground when the
case was transferred to the circuit court. Therefore, the defendant did not waive the issue
of insufficient service of process. Because it is undisputed that service of process was
insufficient, we reverse the judgment of the trial court, and this case is remanded with
instructions to vacate the judgment and to dismiss the action.
Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Circuit Court
Reversed and Remanded
FRANK G. CLEMENT JR., P.J., M.S., delivered the opinion of the Court, in which D.
MICHAEL SWINEY, C.J., and ANDY D. BENNETT, J., joined.
John T. Maher, Clarksville, Tennessee, for the appellant, Sheila Smith.
Christopher W. Conner and Anne Weier, Maryville, Tennessee, for the appellee,
Associates Asset Management, LLC.
OPINION
On June 7, 2010, Associates Asset Management, LLC (“Plaintiff”) commenced this
action against Sheila Smith (“Defendant”) by filing a civil warrant on a sworn account in
Robertson County General Sessions Court. Plaintiff alleged that Defendant defaulted on a
loan as of July 27, 2004, and owed Plaintiff $13,563.04 plus interest.
The procedural history and most of the relevant facts appearing in the record
establish that the initial summons was issued on June 10, 2010, and was served on Chris
Davis, Defendant’s boyfriend, on July 6, 2010, not on Defendant.1 Nearly two years later,
on June 1, 2012, the court entered an Order for Substitution of Counsel of Record for
Plaintiff. Thereafter, the court entered a Notice of Trial Setting, scheduling the hearing on
the matter for November 16, 2012; however, there is no indication in the record that a
hearing took place. On December 7, 2015, more than two years after the court set the matter
for trial, counsel for Defendant filed a Motion to Withdraw due to a “breakdown in
communication between Defendant and counsel,” which the court granted.2
An alias summons was issued on April 11, 2016, and was served on Defendant on
April 29, 2016. Defendant’s new counsel, John T. Maher, filed a Notice of Appearance,
and on June 3, 2016, he filed a motion in the general sessions court to dismiss the action.
In the motion to dismiss, Defendant argued that Plaintiff could not rely on the original
filing of the civil warrant in 2010 to toll the statute of limitations because service of the
summons on her boyfriend was improper. We must assume that the general sessions court
declined to rule on the motion because there is no order in the record. On August 16, 2017,
the general sessions court entered an agreed order transferring the case to the Robertson
County Circuit Court without holding a hearing on the merits in the general sessions court.3
1
The general sessions court civil warrant was issued on June 11, 2010, and service was returned
on July 7, 2010, indicating service by Corporal Kendird on “Chris Davis (boyfriend).”
2
Some of the delays were due to Defendant filing two separate bankruptcy petitions resulting in
automatic stays.
3
The order states the parties agreed the case should be transferred to the circuit court because the
matter was “complex.” See Tenn. Code Ann. § 16-15-732.
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Defendant first appeared in the circuit court on October 25, 2017, with the filing of
a motion to dismiss on the ground that the July 2010 service of summons was insufficient.
Specifically, Defendant argued that
no other service was attempted, nor was it indicated that the officer made any
attempts to personally deliver the service, or that the Court had previously
determined that the Defendant was avoiding process and authorizing
constructive service prior to the April 29, 2016 service.
Defendant contended that service in 2010 was not properly perfected in accordance with
Tenn. Code Ann. § 16-15-903(1); therefore, Plaintiff could not rely on the original filing
of the civil warrant to toll the statute of limitations. Because Plaintiff did not attempt to
recommence the action until April 2016, nearly six years after the original action was
commenced and more than 10 years after the alleged breach of contract in July 2004, its
claim was time-barred in accordance with the six-year statute of limitations for breach of
contract actions under Tenn. Code Ann. § 28-3-109(a)(3).
In its response, Plaintiff conceded that the 2010 service of process was insufficient
but alleged that Defendant made a general appearance in the general sessions court by
repeatedly appearing in that court and by setting and resetting the matter for trial. Plaintiff
also alleged that Defendant participated in discovery prior to raising the issue. Based on
these allegations, Plaintiff argued that any alleged defect in service was cured and,
alternatively, that Defendant was estopped from raising the issue.4
Following a hearing on January 9, 2018, the circuit court denied Defendant’s
motion, ruling:
The Court agrees that the original service of process in this case in June of
2010 was not properly perfected. However, Defendant repeatedly appeared
in Court, contested the matter and repeatedly set, or reset, the matter for trial.
Defendant was represented by counsel who entered a general appearance on
behalf of the Defendant in General Sessions Court. The issue of defective
service was never raised during the first six years of this litigation.
The circuit court also ruled that Defendant was estopped from raising the issue at that time
because she participated in discovery in general sessions court and had not previously
raised the issue clearly and with specificity. On November 19, 2019, the court entered an
Agreed Judgment Order, finding that Defendant was liable for $35,667.42. This appeal
followed.
4
Plaintiff also contended that “on or about January 11, 2013, prior counsel for the Defendant, Amy
Bates, agreed to waive any alleged service of process issues.” We find nothing in the record to support this
allegation, and the trial court made no such finding.
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ANALYSIS
The circuit court correctly determined, and Plaintiff concedes, that the July 2010
service of process was insufficient.5 Nevertheless, Plaintiff argues that Defendant waived
the issue and/or was estopped from raising the issue because Defendant hired counsel who
appeared on Defendant’s behalf in general sessions court, and thereafter, Defendant
participated in discovery and contested the matter for six years before filing a motion to
dismiss.
For her part, Defendant denies participating in discovery in the general sessions
court, and we find nothing in the record to support a finding that she did.6 Thus, the
dispositive issue is whether the appearances by Defendant’s counsel in the general sessions
court constituted a waiver of lack of personal jurisdiction through insufficient or improper
service. See Landers, 872 S.W.2d at 675.
5
Service of process in general sessions court is governed by Tenn. Code Ann. § 16-15-903, which
provides, in pertinent part, that service of process shall be made
(1) Upon an individual other than an unmarried infant incompetent person, by delivering
a copy of the warrant, writ or other papers to the individual personally, or if the
individual evades or attempts to evade service, by leaving copies of the warrant, writ
or other papers at the individual’s dwelling house or usual place of abode with some
person of suitable age and discretion then residing in the dwelling house or usual place
of abode, whose name shall appear on the proof of service, or by delivering the copies
to an agent authorized by appointment or by law to receive service on behalf of the
individual served[.]
(Emphasis added).
Here, Plaintiff concedes that service on Defendant’s boyfriend was not sufficient under the statute.
But according to Tenn. Code Ann. § 16-15-710,
plaintiff, if plaintiff wishes to rely on the original commencement as a bar to the running
of a statute of limitations, must either prosecute and continue the action by applying for
and obtaining new process from time to time, each new process to be obtained within (9)
months from return unserved of the previous process, or plaintiff must recommence the
action within one (1) year after the return of the initial process not served.
An alias summons was issued and served on Defendant in April 2016.
6
A defendant will be estopped from raising the issue of insufficient service of process if the
defendant “engaged in discovery while waiting for the statute of limitations to run.” Goodner v. Sass,
E2000-00837-COA-R3-CV, 2001 WL 35969, at *2 (Tenn. Ct. App. Jan. 16, 2001); Faulks v. Crowder, 99
S.W.3d 116, 125 (Tenn. Ct. App. 2002). Because the record does not support a finding that Defendant
participated in discovery in general sessions court, Defendant was not estopped from raising the issue on
that basis.
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Generally, when considering a Tenn. R. Civ. P. 12 motion to dismiss, the court is
limited to an examination of the complaint; however, when the motion to dismiss is
premised on insufficient service of process, a court may consider matters outside the
complaint without converting the motion to one for summary judgment. McNeary v.
Baptist Mem’l Hosp., 360 S.W.3d 429, 436 (Tenn. Ct. App. 2011). Whether a defendant
waived insufficient service of process is a question of law that we review de novo with no
presumption of correctness accorded to the trial court’s decision. Allgood v. Gateway
Health Sys., 309 S.W.3d 918, 923 (Tenn. Ct. App. 2009).
“[N]otice by service of process in some manner provided by law is essential to give
the trial court personal jurisdiction over the parties, and without jurisdiction, judgment
against a defendant who is not before the court is void and subject to attack.” Yousif v.
Clark, 317 S.W.3d 240, 246 (Tenn. Ct. App. 2010). A defendant can waive lack of personal
jurisdiction through improper service by “making a voluntary ‘general appearance’ before
the court.” Landers, 872 S.W.2d at 675. To find that a defendant made a general
appearance, the record must reflect that the defendant recognized the court’s jurisdiction
by seeking affirmative action from the court on an issue that relates to the merits of the
dispute. Id. at 677. Thus, this court has determined that the mere filing of a notice of
appearance by counsel does not constitute a general appearance for the purposes of waiver.
Bell v. Brewer, No. 01A01-9404-CV-00147, 1994 WL 592099, at *4 (Tenn. Ct. App. Oct.
26, 1994); see also Landers, 872 S.W.2d at 677 (motion seeking a continuance to prepare
a defense did not constitute waiver by general appearance).
In circuit court, the defendant waives the defense of insufficient service of process
by “making a motion that goes to the merits or by filing an answer” without addressing the
issue. Landers, 872 S.W.2d at 677. But, in general sessions courts, litigants are not required
to file written pleadings that conform to the rules of civil procedure. See Ware v. Meharry
Med. Coll., 898 S.W.2d 181, 183 (Tenn. 1995); see also Tenn. R. Civ. P. 1 (“The Rules of
Civil Procedure shall not apply to general sessions courts . . . .”). Instead, litigants may
plead their cases orally. Ware, 898 S.W.2d at 183. Tennessee Code Annotated section 16-
15-505 provides that any issues related to the general sessions court’s jurisdiction must be
raised “before the hearing, or they will be considered as waived.”
Here, the record reflects that the summons was served on Chris Davis in July 2010.
Nearly two years later, on June 1, 2012, the court entered an Order for Substitution of
Counsel of Record for Plaintiff. Thereafter, the court entered a Notice of Trial Setting,
scheduling the hearing on the matter for November 16, 2012. There is no indication in the
record that a hearing took place on that date. On December 7, 2015, more than three years
after the court set the matter for trial, counsel for Defendant filed a Motion to Withdraw
due to a “breakdown in communication between Defendant and counsel,” which the court
granted. The alias summons was issued on April 11, 2016, and was served on Defendant
on April 29, 2016. After Defendant’s attorney, John T. Maher, filed a Notice of
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Appearance, Defendant filed a motion to dismiss, arguing that the July 2010 service was
ineffective, and the action was barred by the applicable statute of limitations.
It is undisputed that Defendant filed her motion to dismiss before the hearing in
general sessions court; therefore, she did not waive her objection to service of process
pursuant to Tenn. Code Ann. § 16-15-505. As for waiver by general appearance, there is
nothing in the record to support a finding that, prior to the filing of Defendant’s motion to
dismiss, Defendant recognized the court’s jurisdiction by seeking affirmative action from
the court on an issue related to the merits of the dispute. See Landers, 872 S.W.2d at 677.
The record shows that Defendant hired counsel to represent her, but, as previously stated,
that fact, alone, does not constitute a general appearance for the purposes of waiver.
Thus, we have determined that the record does not support a conclusion that
Defendant waived the issue of insufficient service of process. Accordingly, we reverse the
trial court’s decision to deny Defendant’s motion to dismiss.
IN CONCLUSION
The judgment of the trial court is reversed, and this matter is remanded with
instructions to vacate the Agreed Judgment Order of $35,667.42 and to dismiss the action.
Costs of appeal are assessed against Associates Asset Management, LLC.
________________________________
FRANK G. CLEMENT JR., P.J., M.S.
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