               IN THE COURT OF APPEALS OF TENNESSEE
                          AT KNOXVILLE
                               January 15, 2015 Session

           AMRESCO INDEPENDENCE FUNDING, LLC ET AL. v.
            RENEGADE MOUNTAIN GOLF CLUB, LLC ET AL.

               Appeal from the Chancery Court for Cumberland County
                No. 2011-CH-452    Ronald Thurman, Chancellor


              No. E2014-01160-COA-R3-CV-FILED-MARCH 31, 2015


This appeal presents the issue of whether service of process was properly effected upon a
nonresident defendant. The defendant filed a limited appearance and motion to dismiss
pursuant to Tennessee Rule of Civil Procedure 12.02, asserting that he had never been
properly served with process. The trial court granted the defendant’s motion, finding that
service of process was never properly completed pursuant to Tennessee Rule of Civil
Procedure 4. The plaintiff has appealed. Discerning no error, we affirm.

      Tenn. R. App. P. 3 Appeal as of Right; Judgment of the Chancery Court
                           Affirmed; Case Remanded

THOMAS R. FRIERSON, II, J., delivered the opinion of the court, in which CHARLES D.
SUSANO, JR., C.J., and D. MICHAEL SWINEY, J., joined.

G. Kevin Hardin, Knoxville, Tennessee, for the appellant, Business Loan Center, LLC.

C. Douglas Fields, Crossville, Tennessee, for the appellee, Joseph Louis Wucher, Sr.

                                       OPINION

                         I. Factual and Procedural Background

       On April 19, 2002, AMRESCO Independence Funding, LLC (“AIF”), agreed to
provide a loan in the amount of $1,333,300 to Renegade Mountain Golf Club, LLC
(“Renegade”). Renegade executed a promissory note to document the loan. In addition,
Michael Haines, Edward Curtis, and Joseph Wucher, Sr., executed personal guarantees
securing repayment of the note. On October 30, 2002, AIF entered into an Asset
Purchase Agreement with Business Loan Center, LLC (“BLC”). BLC purchased the
assets of AIF, including loans payable, as part of the Asset Purchase Agreement. AIF
accordingly assigned its rights in the subject loan to BLC.

       On February 1, 2007, Renegade defaulted according to the terms of the loan at
issue due to lack of payment. A complaint1 was subsequently filed on June 3, 2011, in
the Cumberland County Chancery Court, seeking payment of the outstanding loan
balance from Renegade and the three individual guarantors. Concomitantly, process was
issued by the clerk of the court. Service of process was attempted on Mr. Wucher, a
resident of California, through the Tennessee Secretary of State. Such service was
unsuccessful. The record contains an affidavit and other documentation from the
Secretary of State showing that service of process was attempted via the United States
Postal Service but never completed. Moreover, the record contains no evidence that
process for Mr. Wucher was ever reissued.

       On October 30, 2013, Mr. Wucher filed a limited appearance and motion to
dismiss pursuant to Tennessee Rule of Civil Procedure 12.02, asserting that he had never
been properly served with process in this action. In response, BLC admitted that Mr.
Wucher was never served through the Tennessee Secretary of State. BLC posited,
however, that Mr. Wucher had been properly served via certified mail on November 14,
2011. In support of this contention, BLC filed a copy of the envelope in which the
complaint and summons were allegedly mailed to Mr. Wucher at his California
residence; a United States Postal Service receipt showing a date of mailing of November
14, 2011, along with the costs of the mailing; and a return receipt bearing the signature of
an unknown individual who accepted the mailing as “agent.”

        A hearing was conducted on April 28, 2014, regarding Mr. Wucher’s motion to
dismiss. Thereafter, the trial court entered an order granting Mr. Wucher’s motion. In its
order, the trial court, inter alia, explained the basis for its ruling:

               As to the motion of Mr. Wucher, the Court is of the opinion that
        Rule 4 of the Tennessee Rules of Civil Procedure must be considered and
        applied as a whole, so that notwithstanding the language of section 4.05(5)
        indicating that service is complete upon mailing, tendering the certified
        mail card evidencing mailing of certified mail whether received or not, is
        not sufficient to establish service of process.

               The Court finds that the requirements of 4.03(2) must be met as
        referenced in 4.04(10) and 4.05(a) [and] (b). The record in the case does

1
 BLC states in its brief that the initial complaint improperly named AIF as the plaintiff rather than BLC,
as BLC was the holder in due course of the note. BLC and AIF subsequently filed a motion seeking to
have BLC added or substituted as plaintiff.

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       not contain any return, original or a copy, of any summons purportedly
       served on November 21, 2011 nor does the record indicate any summons
       issued other than the initial summons on June 6, 2011 which the record
       shows was not served on Defendant.

              The Court therefore finds the motion well taken.

       ***

              As to Defendant Joseph Louis Wucher, Sr., the Court further finds
       that the ruling on his motion should be final pursuant to Rule 54.02 of the
       Tennessee Rules of Civil Procedure, there appearing to be no just reason
       for delay and there being no recourse for further attempts of service
       pursuant to Rule 3 of the Tennessee Rules of Civil Procedure. Judgment
       therefore shall be entered in his favor.

BLC timely appealed.

                                   II. Issues Presented

       BLC presents the following issue for review, which we have restated slightly:

       1.     Whether the trial court erred in granting Mr. Wucher’s motion to
              dismiss on the basis of insufficient service of process.

Mr. Wucher presents the following additional issue:

       2.     Whether Mr. Wucher should be granted attorney’s fees because this
              appeal is frivolous.

                                 III. Standard of Review

      The issue involved, sufficiency of service of process, is a question of law, which is
reviewed de novo by this Court without a presumption of correctness. See State ex rel.
Barger v. City of Huntsville, 63 S.W.3d 397, 398-99 (Tenn. Ct. App. 2001).

                         IV. Insufficiency of Service of Process

       BLC asserts that it sufficiently proved service by mail upon Mr. Wucher because it
filed a copy of the envelope that was sent to the address of Mr. Wucher’s California
residence, a receipt from the United States Postal Service showing the mailing date and
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charges, and the return receipt bearing the signature of an alleged agent of Mr. Wucher.
BLC further argues that because Mr. Wucher filed a lawsuit in California asserting that
he was not liable on the subject loan shortly after he would have received the mailing,
such action proves that he was properly served by mail or otherwise had actual notice of
the lawsuit. BLC posits that the service requirements must be construed liberally in favor
of finding effective service, citing Barker v. Heekin Can Co., 804 S.W.2d 442, 443
(Tenn. 1994) (“[T]he apparent purpose of T[ennessee] R[ule of] C[ivil] P[rocedure] 4.04
[is] to insure that process is served in a manner reasonably calculated to give a party
defendant adequate notice of the pending judicial proceedings.”). We note, however, that
actual notice of the lawsuit is not “a substitute for service of process when the Rules of
Civil Procedure so require.” See Hall v. Haynes, 319 S.W.3d 564, 572 (Tenn. 2010)
(quoting Frye v. Blue Ridge Neurosci. Ctr., P.C., 70 S.W.3d 710, 715 (Tenn. 2002)).

       Mr. Wucher contends that Tennessee Rule of Civil Procedure 3 requires that the
unserved initial process be reissued before service could be completed. Tennessee Rule
of Civil Procedure 3 provides:

      If process remains unissued for 90 days or is not served within 90 days
      from issuance, regardless of the reason, the plaintiff cannot rely upon the
      original commencement to toll the running of a statute of limitations unless
      the plaintiff continues the action by obtaining issuance of new process
      within one year from issuance of the previous process or, if no process is
      issued, within one year of the filing of the complaint.

As Mr. Wucher points out, the record demonstrates that the original summons to Mr.
Wucher was issued on June 3, 2011. Service of that summons was unsuccessfully
attempted through the Tennessee Secretary of State, a point which BLC does not dispute.
As the trial court found, there is no evidence in the record that process was ever reissued
pursuant to Tennessee Rule of Civil Procedure 3. Therefore, the summons that was
subsequently attempted to be served by mail was no longer valid as more than ninety
days had passed since its issuance.

       Further, BLC did not obtain the issuance of new process within one year from
issuance of the previous process, as required by Tennessee Rule of Civil Procedure 3.
Mr. Wucher thus posits that the six-year statute of limitations has now run on this breach
of contract issue. See Sims v. Adesa Corp., 294 S.W.3d 581, 585 (Tenn. Ct. App. 2008)
(“Plaintiffs were required to have process reissued within one year from January 26,
2004. Because the Plaintiffs did not do so, their claim was time-barred.”).

      Mr. Wucher also contends that service by mail was nonetheless invalid pursuant to
Tennessee Rule of Civil Procedure 4.03, which states:
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       When process is served by mail, the original summons, endorsed as below;
       an affidavit of the person making service setting forth the person’s
       compliance with the requirements of this rule; and, the return receipt shall
       be sent to and filed by the clerk. The person making service shall endorse
       over his or her signature on the original summons the date of mailing a
       certified copy of the summons and a copy of the complaint to the defendant
       and the date of receipt of return receipt from the defendant.

In the case at bar, BLC did not file the original summons with proper endorsement. BLC
also did not file the required affidavit setting forth the mailer’s compliance with the rule.

         In Estate of McFerren v. Infinity Transport, LLC, 197 S.W.3d 743, 748 (Tenn.
2006), our Supreme Court explained that the requirements of Rule 4.03 are mandatory,
stating:

       Rule 4.03 clearly and specifically requires that a return identify the person
       upon whom process was served and a description of the manner of service.
       It requires, in clear, plain words, that certain things be done. Just as clearly,
       those words either mean something, or they do not. We choose to believe
       they do, that they set forth a mandatory requirement rather than a
       discretionary ideal that need not be strictly enforced to confer jurisdiction
       over a party.

It is clear that the requirements of Tennessee Rule of Civil Procedure 4.03 were not
properly met in this case.

        BLC contends that defects in service of process may be waived if not timely
challenged by a defendant, relying upon this Court’s opinion in Faulks v. Crowder, 99
S.W.3d 116, 126 (Tenn. Ct. App. 2002). In Faulks, one of the defendants did not raise
the defense of noncompliance with Tennessee Rule of Civil Procedure 4.03 until after her
initial answer had been filed, the parties had engaged in discovery, and the case had been
pending for two years. Id. This Court thus ruled that said defendant had waived the
defense of ineffective service. Id. BLC asserts that the same is true here because Mr.
Wucher did not challenge service of process until this case had been pending for over two
years. This case is distinguishable from Faulks, however, because Mr. Wucher did not
file any pleadings prior to his limited appearance and motion to dismiss challenging
service of process. Further, the parties herein did not engage in discovery, nor had Mr.
Wucher otherwise participated in this action. Therefore, there are no facts supporting a
waiver of BLC’s noncompliance with Tennessee Rule of Civil Procedure 4.03. As such,
we agree with the trial court that service of process was never successfully completed
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upon Mr. Wucher in accordance with Tennessee Rules of Civil Procedure 3 and 4. The
trial court properly dismissed Mr. Wucher from this action.

                                  V. Frivolous Appeal

       Mr. Wucher asserts that he should receive an award of attorney’s fees incurred in
defending this appeal, pursuant to Tennessee Code Annotated § 27-1-122. As this Court
has previously explained:

       Parties should not be forced to bear the cost and vexation of baseless
      appeals. Accordingly, in 1975, the Tennessee General Assembly enacted
      Tenn. Code Ann. § 27-1-122 to enable appellate courts to award damages
      against parties whose appeals are frivolous or are brought solely for the
      purpose of delay. Determining whether to award these damages is a
      discretionary decision.

      A frivolous appeal is one that is devoid of merit, or one that has no
      reasonable chance of succeeding. Thus, an appeal in which the reviewing
      court’s ability to address the issues raised is undermined by the appellant’s
      failure to provide an adequate record is deemed frivolous because it has no
      reasonable chance of succeeding.

Young v. Barrow, 130 S.W.3d 59, 66-67 (Tenn. Ct. App. 2003) (internal citations
omitted). Upon our review of the record, however, we determine that this appeal is not
so devoid of merit as to warrant an award of fees on appeal.

                                     VI. Conclusion

        For the reasons stated above, we affirm the trial court’s judgment in all respects.
Mr. Wucher’s request for an award of attorney’s fees on appeal is denied. Costs on
appeal are assessed to the appellant, Business Loan Center, LLC. This case is remanded
to the trial court, pursuant to applicable law, for collection of costs assessed below.




                                                 _________________________________
                                                 THOMAS R. FRIERSON, II, JUDGE




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