Default Judgment in Injury Case Requires Hearing on Damages

After obtaining a default judgment on claims for conversion and malicious prosecution, a plaintiff must “prove the extent of her claimed damages,” and defendant should be given “an opportunity to rebut her evidence or present evidence of his own on the question of damages for those claims before entering a final judgment.”

In Husk v. Thompson, No. M2016-01481-COA-R3-CV (Tenn. Ct. App. Aug. 10, 2017), plaintiff and defendant had lived together before a contentious separation. Plaintiff was charged with domestic assault and ordered not to return to the shared apartment. Plaintiff continued paying her half of the rent for three months even though she was not living there. When defendant failed to pay his portion of the rent due for the apartment two months in a row, plaintiff paid the full amount. Further, there were issues regarding personal property.

Plaintiff filed this suit for conversion, unjust enrichment, and malicious prosecution. Defendant received notice of the suit and was then served at the sheriff’s office, but he did not file an answer. Plaintiff moved for a default judgment, and when defendant did not show up to the hearing, the default judgment was entered. On the day of the default judgment hearing, the trial court entered an order granting plaintiff $15,577.16 in damages.

Defendant appealed both the entry of default judgment and the damages awarded. The Court of Appeals first affirmed the entry of default judgment, noting that defendant “asserted that he failed to file a timely response because he ‘believed no action would be taken in the civil case’ until the criminal cases involving [plaintiff] were resolved.” The Court found that this argument was “equivalent to a claim of ignorance of the law,” and that “ignorance of the law is not excusable neglect or a proper ground for relief” from a default judgment. (internal citation and quotation omitted). In addition, the Court rejected defendant’s assertion that the judgment should be set aside because he did not receive notice of the motion for default. The Court noted that this was really a credibility issues, and that the trial court had decided against defendant. The Court further noted that “the fact that [defendant] received both the complaint and a copy of the default judgment calls into question the veracity of his claim that he did not receive the motion for default judgment.”

Having affirmed the default judgment, the Court then reviewed the trial court’s decision to immediately award damages to plaintiff after the default judgment entry. In Tennessee, “a default judgment establishes the non-defaulting party’s right to maintain the action and recover some damages, but the amount of damages remains an open question to be determined by proof.” (internal citation omitted). In this case, the trial court did not hear any additional proof on damages after entry of the default. The Court of Appeals explained that whether this damage award was appropriate depended upon whether “the damages involved are unliquidated, requiring a determination by proof before the trial court could properly enter a final judgment.” If the damages were unliquidated, they could not “be determined by a fixed formula and must be established by a judge or jury.” (internal citation and quotation omitted).

Regarding her conversion claim, plaintiff’s complaint stated that defendant’s “interference has caused damages to [plaintiff] in excess of six thousand dollars.” Regarding her claim of malicious prosecution, the complaint stated that plaintiff “suffered financial damages and emotional harm as a result of [defendant’s] actions in an amount to be determined at trial but no less than [$5,000].” The Court ruled:

[I]t is clear that the damages claimed for the conversion and malicious prosecution claims are for an uncertain amount and are incapable of being ascertained by a fixed formula. Therefore, the damages sought for those claims are unliquidated. As such, the trial court should have required [plaintiff] to prove the extent of her claimed damages and allowed [defendant] an opportunity to rebut her evidence or present evidence of his own on the question of damages for those claims before entering a final judgment.

The Court also found that there were “unknown facts that prevent[ed] an exact determination of the damages” for the unjust enrichment claim. Accordingly, the entry of default judgment was affirmed, but the case was remanded for a hearing on damages.

The lesson here is to make sure any damages you obtain after a default judgment are calculated and awarded correctly. Going through an additional hearing at the trial court level is much less costly and burdensome than having to go through an appeal and remand.