Connor v. ConnorConnor v. Connor
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- Before:
- Bablitch
¶ 1. Sara Connor (defendant) petitions us to review a decision of the court of appeals that denied her relief from a default judgment entered against her. The circuit court, Judge Robert A. Kennedy presiding, entered the default judgment against her because she failed to serve her answer to a complaint filed by Anderson B. and Thelma A. Connor (plaintiffs) within the statutory deadline and failed to show excusable neglect for her untimely answer. We conclude that the record does not support a
I. FACTS AND PROCEDURAL HISTORY
¶ 2. This lawsuit originated from a disagreement between the parties over property rights, specifically, a dispute over the use of a road. Both parties in this case owned property on the west side of and adjacent to Birch Lake in Forest County. The plaintiffs’ property was located to the north of the defendant‘s property. The plaintiffs gained access to their property by traveling on a north-south road that ran along the western side of the lake. A section of this road crossed the defendant‘s property.
¶ 3. In the fall of 1997, the defendant asked the plaintiffs to use an alternative route. They refused. The defendant then blocked access to the road.
¶ 4. On June 10,1998, the plaintiffs filed a three-count complaint against the defendant. All three counts were based on alleged violations of their easement rights to the road. The first cause of action alleged that the defendant had intentionally interfered with the plaintiffs’ access to the easement road. The plaintiffs sought damages and permanent injunctive relief to prohibit the defendant from interfering with their use of the road. The remaining causes of action alleged (1) conversion or dispossession of property rights and (2) intentional interference with contractual rights. On that same date, the plaintiffs also filed a separate motion for temporary injunctive relief.
¶ 5. On June 15, 1998, the defendant received the summons, complaint and notice of motion for temporary injunction. The summons stated that the defendant was required to respond with a written
¶ 6. The statutory deadline for the defendant to serve her answer was July 30, 1998. The defendant, however, failed to meet this deadline. Instead, she mailed her answer to the plaintiffs on August 4, 1998, and filed the answer with the court on August 10,1998. The defendant substituted attorney Mark Sostarich for Polich as her counsel and filed a substitution of counsel with the court on September 10, 1998.
¶ 7. In response to the defendant‘s answer, the plaintiffs filed a motion to strike the answer and a motion for default judgment. The plaintiffs asserted that they did not receive the defendant‘s answer until August 10, 1998, and that no extension of time to answer was ever requested by or granted to the defendant.
¶ 8. On November 12,1998, the defendant filed a motion requesting the court to accept her answer. The defendant argued that the court should regard her answer as timely served because Polich had received an extension of time to serve the answer from Patrick Juneau, an attorney who worked at the same firm as the plaintiffs’ counsel. An affidavit from Polich attested to this fact and was filed with the defendant‘s motion. In the alternative, the defendant argued that the court should accept the answer because any misunderstanding by Polich about the existence of such an agreement amounted to excusable neglect, requiring an enlarge
¶ 9. The court held a hearing on the parties’ motions on November 16, 1998. The court concluded that Polich‘s affidavit only stated that he understood that there was a courtesy extension agreement between the parties; it did not state that he ever asked for or received an extension. This lack of a clear agreement was a factor in the court‘s conclusion that there was insufficient evidence to support a finding of excusable neglect. The court also based its decision on the amount of time that Polich had to answer the complaint and Polich‘s active involvement in the case prior to the deadline. The court then denied the defendant‘s motion and granted the plaintiffs’ motions. An order was issued on November 30, 1998. On that same date, the court entered judgment only on the first cause of action. The judgment granted permanent injunctive relief to the easement rights of the road and costs associated with this relief to the plaintiffs.
¶ 10. The defendant then filed both a motion for reconsideration and a motion to reopen and vacate the judgment pursuant to
¶ 11. In response, the plaintiffs submitted an affidavit from their attorney, Ann Stevning-Roe. Stevning-Roe admitted that Polich had contacted her
¶ 12. During a March 29, 1999, hearing, the court denied both of the defendant‘s motions. In its decision, the court dismissed Polich‘s second affidavit as unbelievable and “self-serving.” The court further stated that Polich should have sent out confirmation of the agreement and that he should have been aware that the answer was due because he was actively involved in the case prior to the deadline. An order to that effect was issued on April 7,1999.
¶ 13. The court of appeals affirmed, and we accepted review. Two issues are presented: (1) whether the circuit court properly exercised its discretion in granting the plaintiffs’ motion to strike the answer and motion for default judgment; and (2) whether the court properly exercised its discretion in denying the defendant‘s motion for reconsideration and her motion to vacate the default judgment.
II. ISSUE ONE: MOTION TO STRIKE AND DEFAULT JUDGMENT
¶ 14. We examine two orders issued by the circuit court. The first order, entered on November 30, 1998, addressed four separate motions. Two of these motions — a motion to strike the defendant‘s entire
¶ 15. The circuit court noted that it only needed to address the plaintiffs’ motions in this case. The court did not err in this respect. It could proceed in this manner because, under either party‘s motions, the court was required to determine whether excusable neglect was present. See Leonard v. Cattahach, 214 Wis. 2d 236, 248-49, 571 N.W.2d 444 (Ct. App. 1997); Rutan v. Miller, 213 Wis. 2d 94, 101, 570 N.W.2d 54 (Ct. App. 1997); Martin, 117 Wis. 2d at 442. The court correctly applied the excusable neglect standard in this case.
¶ 16. Excusable neglect is not the same as neglect, carelessness or inattentiveness.
Hedtcke v. Sentry Ins. Co.,
109 Wis. 2d 461, 468, 326 N.W.2d 727 (1982). Instead, it is ” ‘that neglect which might have been the act of a reasonably prudent person under the same circumstances.‘”
Id.
(quoting
Giese v. Giese,
43 Wis. 2d 456, 461, 168 N.W.2d 832 (1969)). In the context of an untimely answer, reasonable grounds for noncompli-
¶ 17. A circuit court has great discretion in granting relief based on excusable neglect. Id. at 467. In exercising this discretion, the court must consider whether the interests of justice would be served in its finding. Id. at 468. The interests of justice require the court to be aware that a failure to find excusable neglect could result in a default judgment and that the law generally disfavors default judgments and prefers a trial on the merits. Id. at 469. The court should also balance other competing interests of a default judgment, such as promoting prompt adjudication and encouraging quality legal representation. Id.
¶ 18. We will not disturb a circuit court‘s decision regarding excusable neglect unless an erroneous exercise of discretion is clearly shown. Id. at 471. An erroneous exercise of discretion will result “[i]f the record indicates that the circuit court failed to exercise its discretion, if the facts of record fail to support the circuit court‘s decision, or if this court‘s review of the record indicates that the circuit court applied the wrong legal standard. . . .” Id. at 471-72. If the circuit court enumerates its reasons for finding excusable neglect, we “will focus on the facts of record to determine whether they support the court‘s reasons.” Id. at 471.
¶ 19. Upon review, we conclude that the circuit court properly exercised its discretion in finding that excusable neglect was not present and in granting default judgment. The reasons articulated by the court provide a reasonable basis for this determination and are supported by the record.
¶ 21. The defendant argues that this finding by the court essentially concluded that the courtesy extension agreement was unenforceable because it was not in writing or confirmed in writing. This is an incorrect interpretation of the circuit court‘s decision. The court only concluded that the affidavit did not reflect a clear agreement between the parties; it did not conclude that the agreement was unenforceable because it was not in writing. In fact, the only mention the court made about the agreement not being in writing was that most attorneys confirm such extensions in writing. It did not state that the agreement had to be in writing. Indeed, courtesy agreements that are not reduced to writing may be enforceable in certain instances. See Rutan, 213 Wis. 2d at 102. Here, however, the parties disputed the existence of the agreement; therefore, the court was forced to make a determination as to whether the agreement even existed. Certainly, this case reemphasizes our previous warning that, as a matter of good practice, such agreements should be reduced to writing with additional notification to the court. See Oostburg State Bank v. United Savings & Loan Ass‘n, 130 Wis. 2d 4, 13, 386 N.W.2d 53 (1986).
¶ 22. Also, with respect to the courtesy extension agreement, the defendant argues that the court erred by failing to acknowledge that Polich‘s misunderstanding of the agreement may have constituted excusable neglect. However, at the time of this hearing, there was no evidence — no notes, confirmation letters, or other documentation from Polich — to indicate that he misun
¶ 23. Another reason articulated by the court was that the defendant had reasonable time to serve the answer. In particular, the court noted that the defendant had 14 days in which to file from the time of the temporary injunction hearing to the statutory deadline and concluded that this amount of time was sufficient to file an answer. The defendant argues that this factor was outside the scope of the court‘s analysis for excusable neglect. She asserts that the court‘s focus should have been on whether there was a justifiable explanation for the untimely answer, not on whether there was adequate time to serve the answer.
¶ 24. However, in this case, the defendant made this time frame an issue when it entered Polich‘s affidavit into evidence, which alleged: “[I]t was my understanding that I had been granted a reasonable time to answer after the hearing regarding the Injunction on July 16, 1998 and that, in fact, I answered just four days beyond the statutory time.” In an apparent response to this statement, the court concluded that
¶ 25. Based on the above, we conclude that the record supports the circuit court finding that the defendant failed to show excusable neglect and that it appropriately entered the default judgment. The defendant contends that the court erred because it failed to consider policy reasons weighing against default judgment in its determination. The court, however, was aware of these factors at the hearing. In particular, the defendant informed the court that it had broad discretion in granting motions to enlarge the time to answer and that the law generally treats default judgment as an extreme measure. The fact that the court did not specifically articulate its consideration of these policy factors does not mean that it was not cognizant of these factors before granting the plaintiffs’ motions. The court acted properly.
III. ISSUE TWO: RECONSIDERATION AND VACATING JUDGMENT
¶ 26. We next review the court‘s order that denied the defendant‘s motion for reconsideration and denied her motion to vacate the judgment pursuant to
¶ 27. A circuit court‘s decision to grant or deny a motion under
¶ 28. The defendant sought relief under
On motion and upon such terms as are just, the court, subject to subs. (2) and (3), may relieve a party or legal representative from a judgment, order or stipulation for the following reasons:
(a) Mistake, inadvertence, surprise, or excusable neglect;
(b) Newly-discovered evidence which entitles a party to a new trial under s. 805.15(3);
(g) It is no longer equitable that the judgment should have prospective application; or
(h) Any other reasons justifying relief from the operation of the judgment.
¶ 29. In her motion, the defendant argued that relief was warranted based on the following: (1) Polich‘s misunderstanding of the courtesy extension agreement constituted excusable neglect; (2) the information provided by Polich in his second affidavit constituted newly discovered evidence; and (3) application of the judgment was not equitable. The defendant did not specifically enumerate any basis for relief under subsection (h) in her motion.
¶ 30. We first review whether the circuit court properly exercised its discretion by denying relief under subsection (a). We conclude that it did. The defendant presented Polich‘s second affidavit as a basis for relief under this subsection. In it, Polich alleged that he delayed filing the answer because he wanted to first conduct depositions of the plaintiffs before filing the answer. Polich asserted that he and the plaintiffs’ attorney reached an agreement that an answer would not have to be filed until the depositions were taken. As stated above, the plaintiffs’ attorney specifically denied that any such agreement was reached between the parties.
¶ 31. During the hearing on the motion, the court dismissed Polich‘s affidavit as “self-serving.” It stated
¶ 32. The defendant argues that the court erred in several respects in reaching this determination. First, she contends that the court again erred by basing its decision on the fact that oral courtesy extension agreements are unenforceable unless they are in writing or confirmed in writing. Again, the court did not make any such finding. Instead, the court only noted that there was a lack of any documentation in the record and that, in practice, there would have normally been confirmation letters sent. The court certainly may consider the lack of documentation in making a determination as to whether an agreement existed. Such consideration must not be construed as a requirement that courtesy extension agreements must be in writing.
¶ 33. Second, the defendant contends that the court failed to reconcile the conflicting affidavits in this case to determine whether an oral courtesy extension agreement existed or whether the affidavits showed
¶ 34. Third, the defendant argues that the court failed to consider and articulate interests of justice factors in denying the motion to vacate the judgment. In particular, the defendant asserts that the court should have considered such factors as the drastic consequences of the default judgment in this case, the meritorious defenses presented in the answer, and the lack of any prejudice to the plaintiffs from the late answer. Again, however, the court was made aware of these factors during the hearing and made its decision in light of these relevant interests.
¶ 35. Fourth and finally, the defendant contends that the court erred by imputing the negligence of Polich to her in this case. She argues that Polich‘s negligence took on many forms, including that he was ineffective at the temporary injunction hearing, that he failed to secure a written courtesy extension agreement, and that he failed to provide her with affidavits to prepare for hearings in a prompt manner. According to the defendant, Polich‘s conduct was so egregious in this case that the judgment must be vacated.
¶ 36. “A court is not bound to impute to a client everything his lawyer does or omits to do.”
Charolais Breeding Ranches, Ltd. v. Wiegel,
92 Wis. 2d 498, 514,
¶ 37. The defendant asserts that she took all reasonable steps to protect her position, including forwarding the complaint immediately to her attorney, attending the temporary injunction hearing, and substituting counsel when she believed that Polich was ineffective. On this issue, however, we agree with the conclusion reached by the court of appeals. As the court noted, although the defendant decided to substitute Sostarich for Polich as counsel, the record does not reflect that she made any reasonable inquiry into the status of the case before firing Polich to secure her position in the litigation. As a result, without any such inquiry, we conclude that it is reasonable to impute any alleged negligence on the part of Polich in failing to file the answer to the defendant. 4
¶ 39. On review, we first conclude that the record does not support a finding that Polich‘s second affidavit constituted “newly discovered evidence” under subsection (b). The defendant failed to present any evidence to establish the elements of “newly discovered evidence,” particularly that the information “did not arise from lack of diligence in seeking to discover it.”
See
¶ 40. We also conclude that subsection (g) does not apply in this case. This subsection specifically requires a person seeking relief from the judgment to show that the prospective application of the judgment “is no longer equitable.” Thus, under the clear language of this statute, a change in circumstances is specifically contemplated which makes the judgment no longer equitable. See State ex. rel M.L.B., 122 Wis. 2d at 543-44. The defendant did not allege any such change in circumstances, and as a result, the court did not err by failing to grant relief under this subsection as well.
¶ 41. Finally, we conclude that the court properly denied relief to the defendant under subsection (h). Under this subsection, relief is warranted only when “extraordinary circumstances” are present. Id. at 552. A circuit court considers the following factors in determining whether extraordinary circumstances exist:
whether the judgment was the result of the conscientious, deliberate and well-informed choice of the claimant; whether the claimant received the effective assistance of counsel; whether relief is sought from a judgment in which there has been no judicial consideration of the merits and the interest of deciding the particular case on the merits outweighs the finality of judgments; whether there is a meritorious defense to the claim; and whether there are intervening circumstances making it inequitable to grant relief.
Id. at 552-53.
¶ 42. The defendant never clearly articulated its reason for seeking relief under this subsection. How
¶ 43. Certainly, the effects of the entry of default judgment should be considered by the court; however, simply because the entry of judgment impairs or affects property does not warrant a finding of extraordinary circumstances. Extraordinary circumstances may exist only in extreme and limited cases. This case does not present such extraordinary circumstances.
IV. CONCLUSION
¶ 44. In sum, the circuit court did not abuse its discretion in granting default judgment or in denying the motion to vacate the judgment. The defendant failed to present sufficient evidence of excusable neglect or of any basis for relief under
Notes
All subsequent references to the Wisconsin Statutes are to the 1997 — 98 version unless otherwise indicated.
Polich‘s affidavit stated in relevant part as follows:
2. InMay, 1998, Attorney Patrick J. Juneau of the law firm of Juneau, Minder, Gross & Stevning-Roe, S.C. wrote to me an [sic] informed me that he would be representing Andy and Thelma Connor with regard to their claims of purported blocked access to a road which they contended they had easement rights to. I had numerous conversations and communications with Mr. Juneau and established a highly cooperative working relationship with him.
3. I worked with Mr. Juneau in an effort to amicably resolve the matter, and when it could not be so resolved, worked with him regarding the scheduling of an injunction hearing and the maimer in which this case would be brought before the Court‘s attention. Based upon our communications and our mutual cooperation, it was my understanding that I had been granted a reasonable time to answer after the hearing regarding the Injunction on July 16, 1998 and that, in fact, I answered just four days beyond the statutory time.
Juneau‘s affidavit stated in relevant part:
6. Subsequent to turning the file over to Attorney Stevning-Roe for litigation, your affiant had no discussions with Mr. Polich regarding response times for answer in this proceeding. Your affi-ant never made any reference or had any discussion with Mr. Polich regarding the time to answer so there is absolutely no basis for him to construe that there was an extension of a time to answer granted by your affiant since there was absolutely no discussion that took place regarding the same.
The defendant filed a motion after oral argument requesting that this court allow supplemental briefing and take judicial notice that Polich was not a licensed attorney in Wisconsin at the time that he represented the defendant. However, during the hearing on the motion to vacate the judgment, the defendant specifically represented to the court that Polich was in fact a licensed attorney in Wisconsin. The defendant does not pro vide any compelling reason to this court for her failure to discover this information before the hearing in the circuit court. Accordingly, we deny the defendant‘s motion.