IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER

Transcription

1 E-Filed Document Jun :52: CA Pages: 34 IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER APPELLANT VS. GAY ST. MARY WILLIAMS AND LARRY WILLIAMS APPELLEES ON APPEAL FROM THE CIRCUIT COURT OF HINDS COUNTY, MISSISSIPPI FIRST JUDICIAL DISTRICT BRIEF OF APPELLANT Oral Argument Requested Respectfully submitted, WILLIAM CHRISTOPHER TUCKER, APPELLANT BY: GAMMILL MONTGOMERY, PLLC BY: /s/ Andrew Rueff TOBY J. GAMMILL (MSB #100367) ANDREW RUEFF (MSB #103582) Gammill Montgomery, PLLC 221 Sunnybrook Road, Suite B Phone: (601) Fax: (601) toby@gammillmontgomery.com andrew@gammillmontgomery.com i

2 IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER APPELLANT VS. GAY ST. MARY WILLIAMS AND LARRY WILLIAMS APPELLEES CERTIFICATE OF INTERESTED PERSONS The undersigned counsel of record certifies that the following listed persons have an interest in the outcome of this case. These representations are made in order that the justices of the Supreme Court may evaluate possible disqualification or recusal: 1. Chuck McRae, Esq. 416 East Amite Street Jackson, Mississippi Attorney for Gay St. Mary Williams 2. Toby J. Gammill, Esq. Andrew Rueff, Esq. Gammill Montgomery, PLLC 221 Sunnybrook Road, Suite B Ridgeland, Mississippi Attorneys for William Christopher Tucker 3. Gay St. Mary Williams, Plaintiff/Appellee 4. Larry Williams, Plaintiff/Appellee 5. William Christopher Tucker, Defendant/Appellant 6. Honorable Winston Kidd Circuit Court of Hinds County First Judicial District 407 East Pascagoula Street Jackson, Mississippi Circuit Court Judge, Hinds County, Mississippi ii

3 Respectfully submitted, WILLIAM CHRISTOPHER TUCKER, APPELLANT BY: GAMMILL MONTGOMERY, PLLC BY: /s/ Andrew Rueff TOBY J. GAMMILL (MSB #100367) ANDREW RUEFF (MSB #103582) Gammill Montgomery, PLLC 221 Sunnybrook Road, Suite B Phone: (601) Fax: (601) toby@gammillmontgomery.com andrew@gammillmontgomery.com iii

4 IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER APPELLANT VS. GAY ST. MARY WILLIAMS AND LARRY WILLIAMS APPELLEES TABLE OF CONTENTS CERTIFICATE OF INTERESTED PERSONS...ii TABLE OF CONTENTS...iv TABLE OF AUTHORITIES...v STATEMENT OF ISSUES...1 STATEMENT OF THE CASE...1 STATEMENT OF RELEVANT FACTS...3 SUMMARY OF THE ARGUMENT...4 ARGUMENT...5 A. THE TRIAL COURT ERRED IN FAILING TO SET ASIDE THE CLERK'S ENTRY OF DEFAULT ENTERED AGAINST TUCKER. B. THE TRIAL COURT ERRED IN CONSIDERING THE EVIDENCE AND TESTIMONY IN THE DAMAGES HEARING CONCLUSION...15 CERTIFICATE OF SERVICE...17 iv

5 IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER APPELLANT VS. GAY ST. MARY WILLIAMS AND LARRY WILLIAMS APPELLEES TABLE OF AUTHORITIES CASES: Guar. Nat'l Ins. Co. v. Pittman, 501 So. 2d 377, 388 (Miss. 1987)...7, 19 McCain v. Dauzat, 791 So. 2d 839, 843 (Miss. 2001)...7, 18 Sw. Sur. Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143, 146 (Miss. 1916)...7, 10 State Security Life Ins. Co. v. State, 498 So. 2d 825, 831 (Miss. 1986)...7 Texaco, Inc. v. Addison, 613 So. 2d 1193, 1202 (Miss. 1993)...7 Johnson v. Offshore Express, Inc., 845 F. 2d Greater Canton Ford Mercury, Inc. v. Lane, 997 So. 2d 198, 206 (Miss. 2008)...7 Brown v. Tate, 95 So. 3d 745, (Miss. Ct. App. 2012)...8 Windmon v. Marshall, 926 So. 2d 867, 871 (Miss. 2006)...9 King v. Sigrest, 641 So. 2d 1158, 1162 (Miss. 1994) Allstate Ins. Co. v. Green, 794 So. 2d 170, 179 (Miss. 2001) , 17-18, 21 Tyler Marine Servs. v. Aqua Yacht Harbor Corp. 920 So. 2d 493, 496 (Miss. Ct. App. 2006)...13, 14 Tank Insulation Int'l, Inc. v. Insultherm, Inc., 104 F.3d 83, 88 (5th Cir. 1997)...14 McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298, 304 (5th Cir. 1993) Baker v. Gold Seal Liquors, Inc., 417 U.S. 467, 469 (1974)...14 v

6 American Cable Corp. v. Trilogy Communications, Inc, 754 So. 2d. 545, Bryant, Inc. v. Walters,, 493 So. 2d 933 (Miss. 1986) RULES OF PROCEDURE MISSISSIPPI RULE OF CIVIL PROCEDURE 55(B)...9 MISSISSIPPI RULE OF CIVIL PROCEDURE 55(C) 5-10, etc. MISSISSIPPI RULE OF CIVIL PROCEDURE 60(B)..8, 17-18, etc. Federal Rule of Civil Procedure 13(a) , etc. Mississippi Rule of Civil Procedure 13(a) , etc. vi

7 IN THE SUPREME COURT OF MISSISSIPPI CASE NO CA WILLIAM CHRISTOPHER TUCKER APPELLANT VS. GAY ST. MARY WILLIAMS APPELLEE BRIEF OF THE APPELLANT COMES NOW Appellant, by and through counsel of record, Toby J. Gammill and Andrew Rueff of Gammill Montgomery, PLLC, and files the Appellant s Brief, pursuant to the Mississippi Rules of Civil Procedure and the Mississippi Rules of Appellate Procedure, and respectfully requests that this Court reverse the default judgment entered against William Christopher Tucker in the Circuit Court of Hinds County and render a dismissal of the trialcourt-plaintiff's lawsuit, or in the alternative, remand this case for consideration on the merits by the trial court. I. STATEMENT OF THE ISSUES A. THE TRIAL COURT ERRED IN FAILING TO SET ASIDE THE CLERK'S ENTRY OF DEFAULT ENTERED AGAINST TUCKER. B. WHETHER THE TRIAL COURT S ERRED IN CONSIDERING CERTAIN EVIDENCE AT THE DAMAGES HEARING II. STATEMENT OF THE CASE This lawsuit arose from an automobile accident which occurred in Hinds County on or around February 9 th, (See Accident Report, R., at 29). Gay St. Mary Williams ( Williams ) was making a left hand turn at the intersection of State Street and Beasley Road when she alleges she was struck by another vehicle being operated by William Christopher Tucker ( Tucker ). Id. Both Williams and Tucker were injured in the accident. 1

8 Around six months after this accident, Tucker filed a federal court lawsuit against Williams in the South District of Mississippi, styled Tucker v. St. Mary Williams, Cause No. 3:07-cv DPJ-JCS. (R., at 37). In his lawsuit, Tucker alleged that the accident was caused by the negligence of Williams. Williams filed an Answer to the federal lawsuit denying liability, however, Williams did not raise a counterclaim in her Answer, or at any subsequent time during the litigation. Ultimately, Tucker s lawsuit against Williams was settled between the parties, with William s insurance company paying Tucker $400, (See Release, R., at 72). The lawsuit was dismissed with prejudice on October 28 th, 2008, after over a year of litigation. (R., at 41). Again, at no point during the litigation did Williams assert a counter-claim for damages against Tucker. On February 4 th, 2010, Williams filed her own state court lawsuit in Hinds County Circuit Court against Tucker, alleging personal injury arising from the exact same February 9 th, 2007 car accident which was the subject of the original Tucker v. Williams federal court suit. (See Williams' Complaint, R., at 7). In addition to suing Tucker, Williams also sued Zurich American Insurance Company and Shelter Mutual Insurance Company for uninsured motorist benefits. Summons was issued and in the state court suit, and Tucker was served process. At the time Tucker received the papers from William's attorney's office, Tucker was unaware and/or did not understand that he was being sued, since the Tucker v. Williams case had been dismissed, with prejudice, and settled in his favor for $400, Instead, Tucker understood from the papers he received that Williams was suing her own insurance company, and Tucker would be required to provide a statement regarding the accident. (See Tucker Affidavit, R., at 92). 2

9 Based on this misunderstanding, Tucker did not send the summons and/or Complaint from Williams v. Tucker, et al. to his insurance company, Alfa Insurance. Nor did Tucker file an Answer to William's Complaint. Id. Williams filed an application for Clerk's Entry of Default, which was entered on June 15 th, Subsequent to the clerk's entry of default, Tucker's insurance company, Alfa, became aware of the Williams v. Tucker, et al. state-court suit through a property damage arbitration process. Upon receiving notice of the new lawsuit, Alfa assigned defense counsel for Tucker, and a Motion to Set Aside Clerk's Entry of Default was filed on November 5 th, (See R., at 17). Tucker's Motion to Set Aside Clerks' Entry of Default was heard before the Hinds County Circuit Court on January 24 th, (See Transcript of Hearing, R., at 42). An Order denying Tucker's Motion was entered on July 1 st, (R., at 54). Tucker filed a Motion for Reconsideration on the issue on July 25 th, (R., at 49). The Hinds County Circuit Court heard Tucker's Motion for Reconsideration on October 24 th, (See Transcript, R., at 97). An Order denying the Motion for Reconsideration was entered on November 10 th, (R., at 109). Williams filed a Motion for Hearing on Assessment of Damages on March 28 th, 2013, and a hearing on damages was in fact held on June 14 th, (See Docket Sheet, R., at 1). Williams herself was not present for the hearing (See Transcript from Damages Hearing, R., at 110). Instead, her husband, Larry Williams, was called as the only live witness for the Plaintiff. The deposition transcripts of several doctors, as well as a collection of medical bills and records were offered as evidence by Williams for the damages hearing. 3

10 Ultimately, on November 22 nd, 2013 a Final Judgment was entered in the amount of $2,962, for Williams, and $300, for her husband. (R., at 143). On December 12 th, 2013, Tucker filed his timely notice of appeal. (R., at 151). III. STATEMENT OF RELEVANT FACTS As stated above, there are two separate lawsuits relevant to this appeal. First, Tucker himself sued Williams in federal court shortly after the accident. That first case was resolved via settlement between the parties, and was ultimately dismissed in its entirety with prejudice. At no point during the first lawsuit did Williams assert a counter-claim for damages against Tucker. Then, around sixteen months after the original lawsuit was dismissed in its entirety with prejudice, Williams filed a new lawsuit against Tucker in state court alleging personal injury. It is important to note that the first lawsuit (Tucker v. Williams) was filed in federal court rather than state court. Williams was, and is, a resident of Kentucky, and therefore the original Tucker v. Williams suit was filed in federal court under the basis of diversity of citizenship. The difference between the federal and state procedural rules which govern compulsory counterclaim practice are central to this appeal, and will be discussed in the Appellant's argument. Tucker was served process in the state-court lawsuit, but did not understand, with good reason, that Williams was now suing him in relation to the February 9 th, 2007 accident. (Affidavit of Tucker, R., at 92). Tucker had been paid $400, by Williams after he originally sued her, and the lawsuit had been dismissed with prejudice over a year before he was served process in Williams v. Tucker, et al. These facts, and others, are relevant to Tucker's good faith explanation for his failure to Answer the lawsuit. Furthermore, during his original federal lawsuit, Tucker alleged, and testified during his deposition, that Williams herself was solely at fault in causing the accident. Tucker retained an 4

11 accident reconstructionist expert who reviewed the evidence and testimony, including eyewitness account, relevant to the February 9 th, 2007 accident and reached a similar opinion that the accident was solely the fault of Ms. Williams. (R., at 60). The report was produced to Ms. Williams during the original lawsuit, and shortly thereafter, William paid Tucker $400, to settle this case and dismiss it with prejudice. (R., at 72). These facts are relevant not only to Tucker's good-faith belief that the matter was concluded, but also are relevant to Tucker's colorable defense of the case. For her part, Williams was under the course and scope of her employment at the time of her injury, and as such was able to bring a workers compensation claim against her employer for her injuries. Williams ultimately settled her workers compensation claim for $500, This is relevant to the lack of economic prejudice which Williams suffered as a result of the Tucker's default. (R., at 110). IV. SUMMARY OF THE ARGUMENT The trial court abused its discretion in failing to set aside the clerk's entry of default against Tucker. Rule 55(c) requires that a clerk's entry of default be set aside upon a showing of good case, and an explanation for the basis of default. This is more liberal than the three prong test required under Rule 60, which requires a showing of (1) good case basis for default, (2) colorable defense, and (3) a lack of prejudice for the non-defaulting party. In either standard, this case requires reversal. First of all, Williams waived her right to file a subsequent state court personal injury lawsuit against Tucker when she failed to assert her personal injury claim as a compulsory counterclaim in the original federal court action. The federal rules of procedure controlled the counterclaim issue during the original federal litigation, and made her counterclaim compulsory. 5

12 Under applicable law, a counterclaim which is compulsory, but is not brought, is thereafter barred. For this reason, not only should the default judgment against Tucker be set aside, but Williams' state court lawsuit against Tucker should be dismissed, as she is not legally entitled to recover against Tucker as a defendant. Ignoring the compulsory counterclaim issue, the default judgment should be set aside since Tucker has shown good cause for the default, a colorable defense, and a lack of prejudice against Williams. Since the prior federal court lawsuit was dismissed with prejudice, and resolved via settlement in favor of Tucker for $400,000.00, he had good reason to believe that all issues between himself and Williams were resolved. Upon being served process, Tucker correctly understood that Williams was suing her insurance companies in state court, but because of the prior litigation, did not understand that he was himself being sued. This is especially true since the testimony, eyewitness statements, and expert opinion of his accident reconstructionist in the federal case concluded that he was not at fault in the accident. As for colorable defense, as stated above the compulsory counterclaim issue requires that Tucker be dismissed as a defendant. This is not just a colorable defense, but a dispositive one. Furthermore, the accident reconstructionist report which was prepared in the federal litigation goes above and beyond provided a colorable defense. All of the evidence and testimony from the prior federal litigation which shows that Williams was at fault provides a colorable defense in the subsequent state court case since they arise from the exact same accident. Finally, as for the issue of prejudice, as stated above, and during the damages hearing, Williams received $500, from a workers compensation claim related to this accident, and therefore has not faced economic prejudice from this default. Any one of these factors, which satisfy the three pronged test under Rule 60, could 6

13 also satisfy the liberal Rule 55(c) standard which merely requires that good cause be shown and that setting aside the default serves the interests of justice. V. ARGUMENT Standard of Review Mississippi appellate courts review decisions regarding motions to set aside default judgments for an abuse of discretion. See, e.g., Guar. Nat'l Ins. Co. v. Pittman, 501 So. 2d 377, 388 (Miss. 1987). However, the Mississippi Supreme Court has stated that where there is a reasonable doubt as to whether or not a default judgment should be vacated, the doubt should be resolved in favor of opening the judgment and hearing the case on its merits. McCain v. Dauzat, 791 So. 2d 839, 843 (Miss. 2001) (quoting Sw. Sur. Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143, 146 (Miss. 1916)). Furthermore, the default judgment has been called a drastic remedy that should only be applied in extreme circumstances. State Security Life Ins. Co. v. State, 498 So. 2d 825, 831 (Miss. 1986). The assessment of damages is a finding of fact, and the appellate court reviews an award of damages under the clearly erroneous standard. Texaco, Inc. v. Addison, 613 So. 2d 1193, 1202 (Miss. 1993). The Mississippi Supreme Court has stated that "[d]amage awards are only overturned when the trial judge has abused his discretion or 'in exceptional cases where such awards are so gross as to be contrary to right reason.'" Id. (quoting Johnson v. Offshore Express, Inc., 845 F. 2d 1347, 1356). An appellate court must review the damages award by looking to the "facts of each case." Id. Greater Canton Ford Mercury, Inc. v. Lane, 997 So. 2d 198, 206 (Miss. 2008). 7

14 A. THE TRIAL COURT ERRED BY FAILING TO SET ASIDE THE CLERK'S ENTRY OF DEFAULT AGAINST TUCKER Obtaining a default judgment is a two-step process. First, an Entry of Default must be entered by the trial court clerk, which is obtained through an application for entry of default and supporting affidavits. Next, the plaintiff must obtain a default judgment from the court. Brown v. Tate, 95 So. 3d 745, (Miss. Ct. App. 2012). Rule 55(c) of the Mississippi Rules of Civil Procedure governs the standard for setting aside a clerk's entry of default. The standard under Rule 55(c) is has a less stringent requirements than the standard for setting aside a default judgment pursuant to M.R.C.P. 60(b)." See King v. Sigrest, 641 So. 2d 1158, 1162 (Miss. 1994). These two rules draw a clear distinction between setting aside a clerk's entry of default and setting aside a default judgment. In its entirety, Rule 55(c) reads as follows: (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). Rule 60(b), which governs setting aside a default judgment, as opposed to a clerk's entry of default, reads as follows: (b) Mistakes; inadvertence; newly discovered evidence; fraud, etc. -- On motion and upon such terms as are just, the court may relieve a party or his legal representative from a final judgment, order, or proceeding 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; 8

15 (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. The Mississippi Supreme Court previously has held "there is a more liberal standard for setting aside a default than the standard for setting aside a default judgment." Windmon v. Marshall, 926 So. 2d 867, 871 (Miss. 2006) (quoting King v. Sigrest, 641 So. 2d 1158, 1162 (Miss. 1994)). The Supreme Court further stated, "'good 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." Id. (quoting Allstate Ins. Co. v. Green, 794 So. 2d 170, 179 (Miss. 2001). In Allstate v. Green, the Mississippi Supreme Court suggested that Clerk's Entry of default, as opposed to a default judgment, should be vacated where a defendant can show the existence of a meritorious defense even where no reason was given for failing to timely answer a complaint. Id. When a default judgment has been entered under Rule 55(b), the Mississippi Supreme Court has articulated a three-prong balancing test in determining whether the default should be set aside. The three factors to be considered are (1) whether there was good cause for the defendant s default, (2) whether the defendant has a colorable defense to the merits of the claim, and (3) the nature and extent to which the Plaintiff will suffer prejudice if the judgment is set aside. McCain v. Dauzat, 791 So. 2d 839, 843 (Miss. 2001). A judgment that is void, however, must be set aside upon proper motion. Sartain v. White, 588 So. 2d 204, 211 (Miss. 1991) Mississippi courts have long held that the default judgment is a drastic, remedy which should be applied only in extreme circumstances. State Security Life Ins. Co. v. State, 498 So. 2d 825, 831 (Miss. 1986). Because of the strong, favored policy that cases should be tried on 9

16 their merits, default judgments are not favored and trial courts should not be grudging in the granting of orders vacating such judgment where showings within the rules have arguably been made. McCain v. Dauzat, 791 So. 2d. at 842. The McCain court further stated that where there is a reasonable doubt as to whether or not a default judgment should be vacated, the doubt should be resolved in favor of opening the judgment and hearing the case on its merits. Id (quoting Sw. Sur. Ins. Co. v. Treadway, 113 Miss. 189, 74 So. 143, 146 (Miss. 1916)). See also, King v. Sigrest, 641 So. 2d 1158, 1161 (Miss. 1994) ( [d]efault judgments are not favored and trial judges have traditionally been lenient when it comes to relieving a party of the burden of a default judgment. ) 1. Williams' Failure to File a Compulsory Counterclaim in the Original Federal Lawsuit Tucker v. Williams Bars Her from Recovery Against Tucker, and Therefore Requires that Default be Set Aside, and Williams' Suit Dismissed. As stated above, Rule 55(c) requires that a Clerk's Entry of Default be set aside upon a showing of "good cause." The Mississippi Supreme Court has interpreted this requirement as merely "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). As mentioned above, Williams' February 4 th, 2010 lawsuit arises from a February 9 th, 2007 car accident between herself and Tucker. 1 (R., at 7). Her lawsuit, however, is not the first time this accident has been litigated. Before Williams filed her own lawsuit in state court, she had actually been sued by Tucker in a federal court lawsuit for the exact same accident. (R., at 37). As will be discussed further, this federal court lawsuit was litigated, settled, and dismissed with prejudice upon an agreed order over a year before Williams brought her own lawsuit. 1 Williams husband is a co-plaintiff in this matter, having alleged loss of consortium. Since Mr. Williams' claims are derivative in nature, whether they are upheld or reversed will necessarily depend on Mrs. Williams' claims. As such, this appeal will focus on Mrs. Williams' claims, and when referring to "Williams," it will be inferred that Appellant is challenging Mr. Williams' Default Judgment award as well. 10

17 The federal court lawsuit, Tucker v. Williams, alleged that Williams was responsible for causing the February 9 th, 2007 car accident, and therefore liable to Tucker for personal injury damages. (R., at 37). The lawsuit was filed on August 8 th, 2007, around six months after the accident. The sole parties to the case were Tucker, as the Plaintiff, and Williams, as the Defendant. The lawsuit was filed in the United States District Court for the Southern District of Mississippi, Jackson Division, Civil Action No. 3:07-cv DPJ-JCS. Id. The case was filed in federal court since there was complete diversity between the parties, as Williams was, and remains, as resident citizen of the state of Kentucky. Id. Williams filed an Answer to Tucker's lawsuit in which she denied liability. At the time, she was being defended by attorneys of Daniel Coker, with a legal defense provided to her, upon information and belief, by her liability insurance carrier, Zurich. Important to this appeal, Williams' Answer did not contain a counterclaim against Tucker. Id. Nor did Williams ever assert a counterclaim in any other pleading during the federal court litigation. Instead, Williams chose to defend the claims against Tucker. Ultimately, Williams and Tucker entered into a settlement agreement wherein Tucker was paid $400, to release his claims against Williams. (R., at 72). As part of the settlement agreement, an Agreed Judgment of Dismissal with Prejudice was entered between Williams and Tucker. (R., at 41). That Order, which was signed by Williams' and Tucker's respective attorneys, states that "this entire cause has been compromised and settled as between and among the parties and the same is hereby, dismissed with prejudice." Id. This Order was signed by the federal judge, and entered on January 12 th, In the present case, if Williams wished to bring her personal injury claims against Tucker, she was required to bring them as a compulsory counterclaim in the federal lawsuit. Rule 13(a) 11

18 of both the Mississippi and Federal Rules of Civil Procedure controls the procedure for compulsory counter-claims. Miss. R. Civ. P. 13(a) reads as follows: (a) Compulsory Counter-claims. A pleading shall state as a counter-claim 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 occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties over whom the court cannot acquire jurisdiction. But the pleader need not state the claim if: (1) At the time the action was commenced the claim was the subject of another pending action; or (2) The opposing party brought suit upon his claim by attachment or other process by which the court did not acquire jurisdiction to render a personal judgment on that claim, and the pleader is not stating any counterclaim under this Rule 13; or (3) The opposing party's claim is one which an insurer is defending. Fed. R. Civ. P. 13(a) is slightly different, in that it does not contain the "insurer exception" found in Miss. R. Civ. P. 13(a)(3). The federal rule reads as follows: (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. 12

19 (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. Since the original Tucker v. Williams federal suit was in federal court, and the subsequent Williams v. Tucker, et al. lawsuit was in state court, there is question of whether Rule 13 of the federal rules, or the Mississippi rules governs the compulsory counterclaim at issue in this case. Obviously, the most important consideration is the "insurer exception," since Williams was in fact being defended under her liability policy with Zurich in the original federal case. Thankfully, the Mississippi Court of Appeals already analyzed and determined this choice of law question in Tyler Marine Servs. v. Aqua Yacht Harbor Corp. 920 So. 2d 493, 496 (Miss. Ct. App. 2006). The Tyler Marine case featured an analogous procedural issue where Tyler Marine and Aqua Yacht had first been opposing parties in a previously filed, federal lawsuit. While the federal suit was still pending, Tyler Marine filed a subsequent state court lawsuit against Aqua Yacht which arose from the same dispute underlying the federal lawsuit. Aqua Yacht moved for summary judgment arguing that Tyler Marine's claim should have been raised as a compulsory counter claim. Tyler Marine argued that Mississippi's Rule 13 governed, and since Tyler Marine was being defended by its insurer in the original federal lawsuit, its counterclaim was not compulsory under the "insurer exemption" to Miss. R. Civ. P. 13(a)(3). The Court of Appeals, on review, stated that the federal rules instead controlled, in the following relevant analysis: 13

20 We first note that Federal Rule of Civil Procedure 13, unlike Mississippi Rule of Civil Procedure Rule 13(a)(3), has no insurer exception. Federal Rule of Civil Procedure 13(a) states only: A pleading shall state as a counterclaim 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 occurrence that is the subject matter of the opposing party's claim and does not require for its adjudication the presence of third parties of whom the court cannot acquire jurisdiction. "A counterclaim which is compulsory but is not brought is thereafter barred." 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 (1974)). Because the [original lawsuit] was pending in federal court, we find that the Federal Rules of Civil Procedure applied to Tyler Marine's counterclaim. The claim of Aqua Yacht, the opposing party, against Tyler Marine, which concerned indemnity, stemmed from the same transaction or occurrence as Tyler Marine's later claim in state court against Aqua Yacht. As such, Tyler Marine's claim against Aqua Yacht should clearly have been brought as a compulsory counterclaim in the Lomax suit rather than as an independent state court claim. Id. The Tyler Marine Court went on to state that the purpose of Rule 13(a) in both the Federal and Mississippi system is to "bring a just and speedy resolution to all claims between parties arising out of the same transaction or occurrence and thus avoid unnecessary litigation and expenditure of judicial resources." Id. (citing Tank Insulation Int'l, Inc. v. Insultherm, Inc., 104 F.3d 83, 88 (5th Cir. 1997) and M.R.C.P. 13 cmt.). The Mississippi Supreme Court has held that a compulsory counterclaim "under both Mississippi and the Federal Rules of Civil Procedure 13(a)" is designated as "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 occurrence that is the subject matter of the opposing party's claim." Reid v. Am. Premier Ins. Co., 814 So. 2d 141, 146 (Miss. 2002). Fulgham v. Snell has been often cited for the purpose of explaining the analysis appellate courts use to determine whether a claim arises 14

21 "from the same transaction or occurrence" and is therefore a compulsory counterclaim. 548 So. 2d 1320, 1323 (Miss. 1989). The standard analysis requires that a court consider (1) whether the same evidence or witnesses are relevant to both claims; (2) whether the issues of law and fact in the counterclaim are largely the same as those in the plaintiff's claim; (3) whether, if the counterclaim were asserted in the later lawsuit, it would be barred by res judicata; (4) whether or not both claims are based on a "common nucleus of operative fact. Id. In the present case, there is no question that Williams' claims against Tucker arise from the same transaction or occurrence as the prior Tucker v. Williams federal lawsuit. Both cases arise from the exact same February 9 th, 2007 car accident. These cases are based on an identical nucleus of operative fact. The same evidence and witnesses are relevant to both claims, since there is only one set of evidence and witnesses related to the accident itself and the injuries suffered by Tucker and Williams in the accident. The issues of law and fact are identical, as the issues in both cases are simply how the 2007 accident occurred and who was fault. Simply put, Williams' claim fits squarely within the definition of a compulsory counterclaim under the Federal and Mississippi Rules, and should have been raised during the prior lawsuit. According to both Federal and Mississippi Rules, a party who does not assert a compulsory counterclaim in an original action forfeits her claims. Fulgham, 548 at 1323; McDaniel v. Anheuser-Busch, Inc., 987 F.2d 298, 304 (5th Cir. 1993). Put another way, Williams was procedurally barred from bringing her state court cause of action against Tucker when she filed her state court Complaint. Yet, after capitalizing on Tucker's good-faith misunderstanding of the new lawsuit, Williams secured a Clerk's Entry of Default that turned into a $3.2 million dollar default judgment. If ever there were a case where "good cause" exists under the liberal standards of Miss. R. Civ. P. 55(c), it is this case. If ever 15

22 there were a case where a party has shown that the "interests of justice" are served under Rule 55(c) by setting aside a default, it is this case. Not only does the prior, federal lawsuit procedurally bar Williams from recovering against Tucker, it also serves as evidence for his good cause excuse for failing to respond to the suit. As stated in his affidavit, which was submitted to the trial Court for consideration, Tucker did not understand that the state court lawsuit. (R., at 92). Tucker thought that Williams was suing her own insurance company, and that he was required to give a statement regarding the accident. Id. Tucker's original Motion to Set Aside the Clerk's Entry of Default argued that Tucker's insurance carrier, Alfa, had not received notice of the lawsuit until it received word during the property damage arbitration. (R., at 17) At that point, Alfa hired defense counsel, and Tucker filed a timely Motion to Set Aside the Clerk's entry. The original Motion included an Answer which was incorporated by reference, which included, among other defenses, that Plaintiff's Complaint failed to state a claim and should be dismissed under Rule 12(b)(6), that liability was being denied, and that specific defenses of estoppel and waiver were being reserved and asserted. Id. At the hearing on Tucker's Motion to Set Aside Clerks Entry, Tucker's counsel argued that "this case was fully litigated prior to this complaint being filed [Tucker] actually sued the plaintiff in this case, had very strong defenses and the case eventually settled." (R., at 42). Williams' attorney acknowledged to the trial court that they were aware of the prior federal suit. Id. Nonetheless, the trial court entered a one page Order that denied Tucker's Motion without analysis. (R., at 54). Tucker's Motion for Reconsideration on setting aside the Clerk's Entry of Default was similarly denied in a one page Order which stated that "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 16

23 Clerk's entry of default." (R., at 109). At this point, Tucker had submitted a brief laying out the details of the prior federal lawsuit, (R., at 49) had submitted the accident reconstructionist report from the federal suit which showed Williams to be at fault, had submitted the Release showing that Williams and her insurer had paid Tucker $400, to settle the federal suit, and had submitted the affidavit from Tucker explaining his confusion over receiving the state Court complaint, and noting that he was unaware that he was being sued, and had not turned the papers over to his insurer. 2 During the oral argument at the hearing on Tucker's Motion for Reconsideration, Tucker's counsel argued that "if Ms. Williams had claims in this matter she was required to bring them as a compulsory counterclaim in the first lawsuit." (R., at 97) Tucker's counsel argued that "whether it was that [Tucker] thought this paperwork was from the other lawsuit or whether he thought it had already been taken care of, default judgment is not favored in Mississippi." Despite these arguments and the exhibits submitted to the trial court, the trial court found that "no reason" existed for Tucker's failure to file an Answer, and that "good cause does not exist" as required under Rule 55(c). In light of all the foregoing, this was an abuse of the Court's discretion, and an error that must be remedied. As stated above, Rule 55(c) does not require that a party in default satisfy the three prong test under Rule 60(b). All that a defaulting party must show under Rule 55(c) is either "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). Tucker provided an explanation for default in the affidavit which was submitted to and considered by the Court. However, the Allstate v. Green case stands for the proposition that even where a 2 Williams filed a Motion to Strike the exhibits which were attached to Tucker's Motion for Reconsideration and argued at the hearing that the exhibits should be struck. However, the Court did not strike the exhibits in its Order which was entered on November 10 th, 2011 denying Tucker's Motion for Reconsideration, and did not strike the exhibits in any other Order. 17

24 defaulting party does not offer an explanation for default, a Clerk's Entry, as opposed to a Default Judgment, should be set aside upon the default party's showing a meritorious defense alone. Id. In the present case, between the dispositive compulsory counterclaim issue, and the accident reconstructionist report, Tucker exceeded his responsibility to show a meritorious defense. In light of the fact that Williams' claim was procedurally barred under Fed. R. Civ. P. 13(a), Tucker also exceeded his responsibility to show that "vacation of the default entry would serve the interests of justice. For these reasons, the trial court erred in failing to set aside the Clerk's Entry of Default. 2. Under Rule 55(c) and Rule 60, Tucker Showed Good Cause for Default, Colorable Defenses, No Prejudice Against Williams, and that Setting Aside Default Would Serve the Interests of Justice. To be clear, Tucker argues that the compulsory counterclaim issue is dispositive, and that this matter should be reversed and rendered, dismissing Tucker as a defendant in Williams' state court lawsuit. Nonetheless, even ignoring the compulsory counterclaim issue, the trial court erred in failing to set aside the clerk's entry of default under Rule 55(c) and Rule 60 standards. As stated above, under Rule 55(c), a party under a clerk's entry of default must merely show good cause for default or that vacating the clerk's entry would serve the interests of judgment. Allstate Ins. Co. v. Green, 794 So. 2d 170, 179 (Miss. 2001). Under Rule 60(b) analysis, the three factors to be considered are (1) whether there was good cause for the defendant s default, (2) whether the defendant has a colorable defense to the merits of the claim, and (3) the nature and extent to which the Plaintiff will suffer prejudice if the judgment is set aside. McCain v. Dauzat, 791 So. 2d 839, 843 (Miss. 2001). Under Rule 55(c) analysis, Tucker showed the trial court that he both a good cause for default and that vacating the clerk's entry would serve the interests of judgment. For good cause, 18

25 Tucker, under affidavit, through written and oral argument, and through submission of documents, showed the trial court that the prior federal lawsuit created a justifiable confusion for Tucker once he was served in the state court case. As stated throughout this brief, Tucker sued Williams previously in federal court, participated in discovery, hired an accident reconstructionist, and eventually received a sizeable settlement from his case. Ultimately, the federal case was dismissed, in its entirety, with prejudice, upon the agreement of Williams and Tucker. Therefore, believing the matter to be concluded, Tucker understandably misunderstood the paperwork he received when he was served in the state court case. As he stated under affidavit, he believed Williams was suing her own insurance companies, that he would be required to give a statement, and that he did not know he was a Defendant. A review of the specific language included in the Plaintiff's complaint supports Tucker's claims of confusion. Though Tucker is listed as a Defendant in the heading of the Plaintiff's Complaint, his name is not included among the Defendants listed in the "COMES NOW" paragraph. (R., at 7). In the "WHEREFORE PREMISES CONSIDERED" paragraph on page 5, Tucker himself is listed as the "Plaintiff." After filing his own suit, testifying by deposition, working to prove that the accident was cause solely by Williams, and then being paid $400, by Williams' insurance company before dismissing the lawsuit with prejudice, Tucker was justified in believing that both the February 9 th, 2007 accident and his dispute with Williams were both over for good. For this reason, he did not understand he was being sued by Williams in state court, did not send the papers to his insurance company, and ended up in default. In Guaranty Nat'l Ins. Co. v. Pittman, the Supreme Court found that the defaulting party's confusion over whether he had insurance or not did not justify his failure to respond to a lawsuit. However, the Court insinuating that had the 19

26 defaulting party 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," could justify a failure to respond. 501 So. 2d 377, 388 (Miss. 1987). In light of all of the circumstances surround the prior case, and Tucker's legitimate misunderstanding of his role in the state court lawsuit, Tucker showed good cause for default. As for showing that vacating the judgment would serve the interest of judgment, Tucker met this element as well. Tucker presented to the trial Court evidence of an accident reconstructionist report showing Williams to be solely at fault. This report included eyewitnesses to the accident which supported his version of how the accident occurred. Tucker provided the Court with evidence that Williams had previously paid Tucker $400, to settle his lawsuit against Williams. Clearly, Tucker was prepared to defend this accident on the merits just as vigorously as he had prosecuted his own lawsuit against Williams years before. Most importantly, as argued above, justice is served by reversing a $3.2 million dollar default judgment in a lawsuit which was procedurally barred before it was even filed. These same arguments satisfy even the more stringent requirements of Rule 60(b). Tucker's "good cause" argued above for the Rule 55(c) analysis apply the same for the first prong of Rule 60(b) analysis. In American Cable Corp. v. Trilogy Communications, Inc., the Court of Appeals considered accidents or mistakes in light of the three prong balancing test for setting aside default judgments, particularly differentiating between a real, negligent mistake, and one that is frivolous. 754 So. 2d. 545, 556. That court held that even where the record shows a delay, even a possible lack of zeal on behalf of a defendant, the important consideration is whether there was a frivolous failure to take some steps in responding to the litigation. Id. In 20

27 this case, Tucker did not ignore the lawsuit, and did not frivolously fail to respond. Instead, he justifiably misunderstood the papers he received. Even though Tucker's innocent, inadvertent mistake in failing to respond provides adequate grounds for setting aside the default, courts have held that even where no good cause exists, a motion to set aside may still be granted based on the other factors. In American Cable Corp, the Court of Appeals considered the question of whether the fact that no valid reason exists for failing to respond to the litigation by itself justifies the manner in which the trial court s discretion was exercised. Id, at 556. The Court's response was as follows: The supreme court has made this relevant statement: upon a showing by the defendant that he has a meritorious defense, we would encourage trial judges to set aside default judgments in a case where, as here, no prejudice would result to the plaintiff. The importance of having a trial on the merits should always be a serious consideration by a trial judge in such matters. Bryan, Inc. v. Walters, 493 So. 2d n. 3 (Miss. 1986). Id. Tucker's colorable defenses (from the dispositive compulsory counterclaim issue to the accident reconstructionist report) have been argued extensively in this brief. The Mississippi Supreme Court has held that of the three factors for a court to consider in deciding whether or not to set aside a default judgment, the existence of a colorable defense is the most important. Allstate Ins. Co. v. Green, 794 So. 2d 170, 174 (Miss. 2001). A colorable defense outweighs the other [factors] in importance. American Cable Corp., 754 So. 2d at 555. When a defendant in default has a colorable defense, this is a factor which should often be sufficient to justify vacation of a judgment. Pointer v. Huffman, 509 So. 2d 879, 876 (Miss. 1987). The courts have defined a colorable defense as one that is good at law so as to give the fact-finder some determination to make. American Cable, 754 So. 2d at

28 The final element, prejudice against the non-moving party, weighs in favor of Tucker as well. Williams chose not file her lawsuit until a matter of days before the statute of limitations would have expired, almost three years after the accident. Williams chose to wait until June 14 th, 2013 to hold her damages hearing. Williams has sued other Defendant insurance company, but chose to file a motion to stay the litigation in her state court action. The delays in this case have been of Williams' own making, and any alleged prejudice caused by delay is not the fault of Tucker. As far as economic prejudice, as mentioned previously, Williams pursued a workers compensation claim for her injuries in this accident. Through this workers compensation claim, Williams' medical treatment related to this accident was paid, and she received a $500, settlement. With medical furnished by workers compensation, and with a $500, lump sum payment, Williams cannot in good faith argue that she will suffer economic prejudice if this default is set aside. Tucker was not required to meet the more stringent three-pronged test of Rule 60(b) analysis, since his original motion was merely to set aside a clerk's entry of default and not a default judgment. Nonetheless, analyzing these factors illustrates the quantity, and quality of proof which was before the Court, and which mandated that the Clerk's entry of default against Tucker be set aside. In failing to do so, and instead finding that Tucker had not shown "good cause" under Rule 55(c), the trial court committed error. Default should have been set aside under the liberal requirements of Rule 55(c). Default should have been set aside under Rule 60(b)(4), as Williams' failure to bring her cause of action as a compulsory counterclaim makes her judgment void. Finally, Tucker showed justifiable grounds for setting aside the judgment under Rule 60(b)(6)'s "grand reservoir of equitable power to do justice in a particular case when 22

29 relief is not warranted by the preceding clauses." Bryant, Inc. v. Walters,, 493 So. 2d 933 (Miss. 1986). B. THE TRIAL COURT ERRED IN CONSIDERED CERTAIN EVIDENCE DURING THE DAMAGES HEARING The transcript from the damages hearing is made part of the record, along with the memorandum opinion of the Trial Court in which Williams was awarded $2,962, and her husband was awarded $300, (R., at 110, and 143, respectively). Review of the Order and the transcript show a number of errors committed by the trial court during the hearing, and in reaching the final default judgment. As argued previous above, Williams did not even show up to testify at her damages hearing, citing her medical condition. There was no medical proof, testimony or otherwise at the hearing that the Plaintiff had a physician s appointment on the day of the hearing. Id. Although her husband testified she had a doctor s appointment on the day of the hearing, there was no admissible proof from any physician that the appointment existed or that the Plaintiff was actually at a doctor s appointment. This was simply hearsay by Williams husband. In the relevant facts and procedural history listed in Roman Numeral I in the Court's memorandum opinion and order, it states that Williams suffers from constant pain and suffering that is permanent. It also states that she has suffered and continues to suffer severe and permanent injuries as well as considerable pain and suffering and emotional distress as a result of this car accident at issue. However, as stated above, the Plaintiff did not appear at her hearing. Objections were made on the record to the damages hearing related to this issue. (R., at 110). There was no admissible testimony regarding at the damages hearing regarding Williams' pain and suffering. The Plaintiff s husband appeared and testified as to an amount of medical bills in excess of $300, However, it was established and it is on the record that these medical 23

30 bills were paid by workers compensation carrier of Ms. Williams, and she has received $500, in settlement proceeds from the workers compensation carrier on top of payment of the medical bills. The order further states that not all medical records and bills were available as the Plaintiff is still treating for her injuries. This is an extremely conclusory statement as the Plaintiff was not present to testify at the hearing nor were there any documents or admissible proof, testimony, or treating physician statements that there is any need for future treatment much less any future appointments. The next conclusory statement contained in the order is related to (on page 4) doctor s testimony that the Plaintiff will be treated for the rest of her life with hospital and doctor s visits. No such physician has testified to this conclusory statement, as indicated in the various expert depositions which are filed along with this brief. (R., 190, 199, 218). The lost wage information contained within the Order is extremely speculative and there was no admissible proof submitted at the hearing other than the husband s hearsay statements of earnings. There was no employer statement submitted, verified by affidavit or any other admissible proof, that the Plaintiff has lost $750, in lost wages. Further, the order contains life expectancy of the Plaintiff for 22.2 years. This is information that is an attempt to back-door expert opinions in without the use of an expert witness or economist. The table of life expectancy submitted at the hearing from the U.S. Census Bureau was objected to at the hearing. The order is also incorrect that all three defendants joined in an oral motion to strike any future wages because an economist did not testify solely because it was not reduced to the net present value of today. Any ad all information or calculation of lost wages was objected to at the 24