COURT OF APPEALS DECISION DATED AND FILED |
NOTICE |
October 22, 1998 |
This opinion is subject to further
editing. If published, the official version will appear in the bound volume
of the Official Reports. |
Marilyn L. Graves Clerk, Court of Appeals of Wisconsin |
A party may file with the Supreme Court
a petition to review an adverse decision by the Court of Appeals. See § 808.10 and Rule 809.62, Stats. |
|
|
|
|
STATE OF WISCONSIN |
IN COURT OF APPEALS DISTRICT IV |
|
|
Barbara
Doyle,
Plaintiff-Respondent, v. Ronald
A. Arthur,
Defendant-Appellant. |
|
||
APPEAL from an order of the circuit court for Juneau County: john w. brady, Judge. Affirmed.
Before Eich, Vergeront and Deininger, JJ.
EICH, J. Ronald
Arthur appeals from an order granting the motion of the plaintiff, Barbara
Doyle, for default judgment and awarding damages. He raises several challenges to the order, all of which we
reject.
Arthur, a Milwaukee attorney,
owns land in Juneau County adjoining property owned by Doyle. In 1994—unbeknownst to Doyle—Arthur
contracted with Statewide Log & Lumber Company (a corporation owned and
controlled by Arthur’s former clients, William and Randy Keefe) to harvest
trees on his land, apparently in contemplation of developing the property.
According to William Keefe, who
testified at the hearing on Doyle’s damages, Arthur told him that, in logging
the property, he “didn’t have to worry about property lines” and in fact lied
to him about the location of the line separating his property from
Doyle’s. Arthur also told Keefe that he
needn’t worry about how the operation might affect adjoining property because
he (Arthur) and his wife, also an attorney, “could keep people tied up in court
for … years and make litigation so expensive that they would give up rather
than face him.” As the work commenced
in early 1995, the Keefes, believing they were on Arthur’s property, plowed a
two-hundred-foot long, ten-foot wide—and, in some places, four-foot
deep—logging road across the corner of Doyle’s property, knocking over trees
and shrubs and creating serious erosion problems. Six large oak trees were also removed from the property. Doyle did not discover the damage until
several weeks later.
Doyle had purchased her four-acre
parcel largely because of its unique beauty.
It is wooded land rising to bluffs in the rear, and she and her family
use it on a regular basis for picnics and family botany excursions. Doyle considered the damaged area to be the
most beautiful part of the property.
Even with the extent of physical damage caused to the property, however,
its fair market value did not decrease.
However, according to Doyle’s expert witnesses, it would cost at least
$34,720 to restore it to a condition close to that obtained prior to the
damage.
After learning that Doyle
intended to sue him for the damage to her property—but before she filed the
action—Arthur brought his own lawsuit in Dodge County, naming Doyle and the
Keefes (along with several others) as defendants, and seeking a declaratory
judgment that he was not responsible for any damage to Doyle’s property. Several days later, on September 11, 1995,
Doyle filed this action in Juneau County, asserting several causes of action
against Arthur for the damage to her property, and seeking both compensatory
and punitive damages.
Arthur didn’t answer Doyle’s
complaint. He moved to dismiss it on
several grounds: lack of subject matter jurisdiction; failure to state a claim
upon which relief can be granted; failure to join a necessary party; and the
pendency of another action (his Dodge County lawsuit) between the parties for
the same cause. A hearing was held on
Arthur’s motion on November 30, 1995.
The court orally denied the motion, but then decided to hold the
decision in abeyance pending the outcome of a hearing in Arthur’s Dodge County
action on Doyle’s motion to dismiss, which, if granted, would moot Arthur’s
jurisdictional arguments in this case.
The Dodge County action was eventually dismissed, and the trial court
entered its order denying Arthur’s motion to dismiss this action on July 5,
1996.
On October 24, 1996, Doyle moved
for default judgment against Arthur for failing to answer the complaint. Five days later, Arthur filed a document
entitled “ANSWER.” It is a
one-paragraph statement “den[ying] each and every allegation [of the
complaint],” and purporting to “incorporate[] by reference all of the pleadings
and documents in [the Dodge County] Case, and all of the pleadings and
correspondence between the parties and their counsel relating to this
matter ….” Following a hearing,
the court ruled that the document did not constitute an answer to the
complaint, as required by statute, and that Arthur’s failure to answer was not
the result of excusable neglect. It
then entered default judgment against him and set a hearing on damages.
After a two and a half day
“trial” on Doyle’s damages, the court issued a memorandum decision and order
awarding her $34,720 in “restoration cost” damages, together with punitive
damages of $75,000. This appeal
followed.
Whether to grant default judgment
is within the sound discretion of the trial court. Oostburg State Bank v. United Sav. & Loan Ass’n,
130 Wis.2d 4, 11, 386 N.W.2d 53, 57 (1986).
In reviewing discretionary decisions, we determine only whether the
trial court examined the facts of the record, applied proper legal standards,
and reached a reasonable conclusion. Loy v. Bunderson, 107 Wis.2d 400, 414-15, 320 N.W.2d 175,
184 (1982). If the record shows that
discretion was in fact exercised and we can perceive a reasonable basis for the
court’s decision, we will affirm. Prahl
v. Brosamle, 142 Wis.2d 658, 667, 420 N.W.2d 372, 376 (Ct. App.
1987). Indeed, we generally look for reasons to sustain discretionary
decisions. Burkes v. Hales,
165 Wis.2d 585, 591, 478 N.W.2d 37, 39 (Ct.
App. 1991).
A court may grant default
judgment under § 806.02(1), Stats.,
“if no issue of law or fact has been joined and if the time for joining issue
has expired.” Arthur argues first that
the many documents he filed in his Dodge County lawsuit—documents he claims he
“incorporated” into this action, and
which he asserts “straightforwardly disputed the material allegations of
Doyle’s complaint” and thus clearly advised her of his position with respect to
her claims—sufficiently joined the issues in this case that he should be
considered to have adequately “answered” the complaint. Pointing to the purported “answer” he filed
in this action, he also argues that, because “technical forms of pleadings” are
not required in Wisconsin (§ 802.02(5),
Stats.), because “pleadings should be so construed as to do
“substantial justice” (§ 802.02(6)), and because the court must disregard
pleading “defects” which do not affect the substantial rights of an adverse
party (§ 805.18, Stats.), his
submissions, taken together, are sufficient to defeat Doyle’s motion for
default judgment.
We are not persuaded. The trial court signed the order denying
Arthur’s motion to dismiss Doyle’s complaint on July 5, 1996. Under § 802.06(1), Stats., Arthur then had ten days after that date in which to
file an answer, which he failed to do.
It wasn’t until Doyle moved for default judgment—more than three months
after entry of the denial order—that he filed the document he now asks us to
consider as his answer to the complaint.
This document, however, is not only three months tardy, but it fails to
comply with the requirements of § 802.02(2), which state that the answer
should: (a) “admit or deny the averments” in the complaint; (b) state
“[d]enials [which] meet the substance of the averments denied”; and
(c) include “specific denials of designated averments or paragraphs” in
the complaint. Arthur’s “answer,” and
the documents with which he inundated the trial court, not only fail the test
of timeliness, but are equally lacking in both form and substance.
Arthur next argues that the fact
that the court accepted and considered three affidavits at the hearing on his
motion to dismiss Doyle’s complaint establishes that “issue was joined in the
case” regardless of his failure to file a timely answer. His argument proceeds as follows: (1) Section
802.06(2)(b), Stats., states that
where matters outside the pleadings are presented in connection with a motion
to dismiss, and are not excluded by the court, the motion is to be treated as
one for summary judgment; (2) because the trial court considered the
affidavits at the hearing, the proceedings evolved into a summary-judgment
hearing; and (3) because hearing a summary-judgment motion before the
pleadings are complete is not authorized by statute, it follows that the
pleadings must be deemed to have been complete—that is, that issue must have
been joined—by the date of the hearing.
While the argument, superficially at least, has a logical form, it, too,
lacks substance, for, while the trial court did consider affidavits at the
dismissal-motion hearing, it did so only as an aid in considering Arthur’s
procedural and jurisdictional arguments.[1] Arthur’s argument that the procedure followed by the court
somehow waived his obligation to answer the complaint is unavailing.
Arthur next raises several challenges to the court’s award of punitive damages, claiming that: (1) the complaint fails to state a claim for punitive damages; (2) even if appropriate, “punitive damages should have been limited to double damages as provided [in] § 26.09, Stats.”; (3) the award is not supported by the evidence; and (4) it is excessive.
As to the first, Doyle alleged in her complaint that
Arthur (through his agents) trespassed on her land, cut and removed trees,
converting the proceeds therefrom to his own use, and conspired to defraud her
and engage in the theft of her timber.
She also alleged that these acts (and others) were undertaken “in wanton
and reckless disregard of [Doyle]’s rights [and] interests ….” Arthur does not argue that these allegations
are insufficient in themselves to state a claim for punitive damages; rather,
he argues that they “fail[] utterly to allege a ‘master-servant’ relationship
between Arthur and anyone else” (presumably the Keefes and/or any other people
acting on his behalf). We think the
allegations are sufficient, under Wisconsin’s notice-pleading rules, to state a
punitive damage claim. See Hertlein v. Huchthausen,
133 Wis.2d 67, 72, 393 N.W.2d 299, 301 (Ct. App. 1986) (“fair notice of what
the … claim is and the grounds upon which it rests” is all that is required of
a pleading).
Citing Hartland Cicero Mutual Insurance Co. v. Elmer, 122 Wis.2d 481, 363 N.W.2d 252 (Ct. App. 1984), Arthur next argues that § 26.09, Stats., which authorizes a landowner to recover “double the amount of damages suffered” by reason of “any person unlawfully cutting, removing or transporting raw forest products,” limits Doyle’s recovery to double her actual damages, and precludes any award of punitive damages. Hartland, however, held only that the statutory double-damage provisions for “timber trespass” are not “punitive damages” within the meaning of an insurance policy excusing coverage for “all punitive damages caused by [a covered] occurrence.” Id. at 483, 363 N.W.2d at 253. Beyond that, Doyle’s complaint, as we have noted above, alleges more than a “timber trespass”—it also seeks damages resulting from Arthur’s construction of the logging road through her property. Arthur has not persuaded us that the existence of § 26.09 either limits or nullifies the court’s authority to award punitive damages in this case.
We reach a similar result with respect to his argument
that the punitive-damage award is excessive and unsupported by the
evidence. As to the latter, he confines
his challenge to arguing that there was insufficient evidence “to prove, first,
that there was a master-servant relationship [between Arthur and the Keefes],
and second that Arthur ratified the acts of the Keefes.” He makes no argument with respect to the
adequacy of the evidence to support the following findings made by the trial
court: (1) that Arthur “abuse[d] the legal process”;
(2) that his testimony was “evasive, inaccurate and unworthy of belief”;
(3) that he accused various parties of extortion, conspiracy, theft and
perjury (and accused the court of being biased in the action); (4) that he
used his position as an attorney to create numerous “conflicts of interest”;
(5) that he lied to the Keefes regarding the property line to avoid
additional costs; (6) that he “intentionally and maliciously used his and
his wife’s position and knowledge as attorneys in an all out effort to
intimidate Doyle into not pursuing her claims, intimidate her legal counsel
into ceasing to represent her ... and to make her legal fees so exorbitant that
she could not afford to fight him”; and (7) that he “embarked on a path of
lying to the court and trying to frustrate the discovery process, all to the
injury of Doyle.” Those findings,
unchallenged by Arthur, are more than adequate to justify an award of punitive
damages.
As to the amount of the award,
Arthur argues that because Doyle’s actual damage was “de minimis,” in
light of the expert testimony that his actions did not significantly diminish
the market value of her property, “the $75,000 punitive damage award is
certainly disproportionate to the inconsequential damage done to [the]
property.” In Jacque
v. Steenberg Homes, Inc., 209
Wis.2d 605,
609,
563
N.W.2d 154,
156
(1997),
however, the supreme court held that, in a trespass-to-land case, even an award
of “nominal damages”—in that case one dollar—can sustain an award of punitive
damages. And, in Jacque,
the court upheld an award of $100,000 in punitive damages, despite the
one-dollar compensatory-damage award, where the defendant had damaged the
plaintiff’s land by moving a house trailer across it, and where the court
characterized the defendant’s actions as a “brazen, intentional trespass”
undertaken with “indifference and a reckless disregard for the law, and for the
rights of others.” Id. at
628, 563 N.W.2d at 164. Using Jacque
as a guide, Arthur has not persuaded us—given the trial court’s findings with
respect to his conduct—that the $75,000 award was excessive.
Arthur next argues that the trial
court erred in awarding compensatory damages of $34,720—which he characterizes
as “replacement cost” damages—based on the testimony of Doyle’s experts that
that sum of money would be required to restore Doyle’s land to its former
condition. He claims first that a
default judgment may not be entered for more than the amount demanded in the
complaint, which he says was $4,000.
And while, as Arthur points out, there are cases stating generally that
“[i]n the case of a default judgment, relief is limited to that which is
demanded in the plaintiff’s complaint,” Klaus
v. Vander Heyden, 106
Wis.2d 353,
359,
316
N.W.2d 664,
668
(1982),
we note that the ad damnum clause of Doyle’s complaint sought damages in
“the amount of $4,000, plus such additional amount that will fully
compensate Plaintiff for her loss and damages” (emphasis added). And many other cases have held that, “[u]pon
entry of a default judgment, the circuit court may hold a hearing … to
determine damages.” Hedtcke
v. Sentry Ins. Co., 109
Wis.2d 461,
478-79
n.5, 326 N.W.2d 727,
736
(1982);
see also Apex
Elecs. Corp. v. Gee, 217
Wis.2d 378,
387,
577
N.W.2d 23, 27 (1998)
(circuit court may require “additional proof beyond the complaint” when
assessing unliquidated damages on a default judgment); Martin
v. Griffin, 117
Wis.2d 438,
445,
344
N.W.2d 206,
210
(Ct.
App. 1984)
(trial court granting default judgment has option of holding a hearing for
proof of any fact necessary to render judgment). The trial court followed accepted procedures in holding the
hearing on damages in this case—a hearing that provided Arthur with notice of
the amount being sought, and one in which he participated fully. We see no error.
Arthur also argues that, because
the trees which were destroyed or removed were “timber and [were] not shade
trees,” it was error to assess damage based on their replacement or restoration
cost. First, Doyle’s damage claim was
not limited to the loss of the trees, but, as we have emphasized above, also
encompassed claims for considerable additional damage to her property caused by
the digging of the logging road. Second,
as we noted in Threlfall
v. Town of Muscoda, 190
Wis.2d 121,
133,
527
N.W.2d 367,
371-72
(Ct.
App. 1994),
“[b]ecause recovery in trespass is based on a wrongful invasion of a
plaintiff’s rights, the rule of damages adopted should more carefully guard
against failure to compensate the injured party than against possible
overcharge to the wrongdoer.” We went
on to hold in Threlfall that a plaintiff, whose “ornamental”
shrubs and trees were destroyed by the defendant’s trespass, could recover
damages based on their replacement cost—even though they “had no fair market
value and their cutting increased the market value of the plaintiff’s
land.” Id. at 133, 527
N.W.2d at 372.
The record in this case indicates
that Doyle not only suffered the loss of the trees, but the improper cutting of
the logging road through her property caused ecological damage, erosion
problems and changes to the watershed, and there was testimony that at least
$34,720 would be needed to return the property to its original condition. We see no error in the trial court’s award
of compensatory damages.
Finally, Arthur raises a series
of “due process” arguments. First, he
claims that the trial court failed to explain its reasons for denying his
motion to dismiss Doyle’s complaint, and “denied [him] the opportunity for
hearing on the motion.” In particular,
he objects to the fact that the order denying his motion simply recites that it
was being entered “for the reasons stated by the court at the hearing held on
November 30, 1995.” At the November 30
hearing, the court indicated that it was denying Arthur’s motion to
dismiss—which was based in large part on the pendency of the lawsuit Arthur had
started in Dodge County—on grounds that both the property at issue and the
“principal” party to the dispute, Doyle, were located in Juneau County, and Doyle’s
counsel was directed to prepare the order.
And we agree with the trial court that, because Arthur never objected to
the order as drafted and entered,[2] any portions of his motion not specifically addressed by
the court at the hearing were effectively abandoned. Finally, Arthur’s assertion that the court never “provided him
the opportunity to respond” to a letter from Doyle to the court asking for a
ruling on his motion to dismiss after more than six months had passed since the
hearing, is wholly unavailing. His
motion and supporting arguments were fully heard by the court at the November
30 hearing.
Arthur’s argument that he
was “denied the assistance of counsel”
on the second day of the three-day hearing on damages, in violation of his
due-process rights, is equally meritless.
Arthur was ostensibly represented by his wife, also an attorney, on the
first day of the hearing, and the trial court declined to adjourn the
proceedings when his wife indicated, without elaboration, that she would be
unable to attend on the second day, leaving Arthur to represent himself. Arthur, an experienced attorney, had acted
as his own counsel throughout the proceedings, as well as in many of the other
related lawsuits he commenced in other counties. And there is, as Arthur should know, no right to the assistance
of counsel in civil actions. He had a full hearing on damages, and he
participated fully and actively in that hearing. We see nothing unconstitutional, illegal, or even unfair about
the trial court’s failure to adjourn the proceedings.
Finally, Arthur argues that the
trial court never acted on his motion to implead a non-party and “refused [him]
the opportunity to offer evidence in defense of liability” at the hearing on
damages. As to the first, his impleader
motion was filed on November 20, 1996—more than fourteen months after the
filing of the summons and complaint—and, contrary to Arthur’s assertion that
his motion was never acted on, the court specifically noted in its March 26,
1997, memorandum decision that, “[b]ecause Arthur has been found to be in
default and a default judgment [has been] authorized in this case there is no
reason to consider [his] motion … for leave to implead third parties.” The court’s observation, with which we
agree, compels rejection of Arthur’s “evidence in defense of liability”
argument as well. As a defaulting
defendant, he had long ago lost the right to contest liability.
By the Court.—Order affirmed.
Not recommended for publication
in the official reports.
[1] The affidavits were submitted by Doyle’s counsel to show that Arthur had filed similar actions, involving the same parties, in Milwaukee County, Marquette County and Dodge County, and that only a small portion of Arthur’s Dodge County lawsuit—the existence of which he put forth as a bar to the instant action—involved Doyle. The affidavits were filed for the limited purpose of showing that Arthur was attempting to move his suit from Juneau County, where the damage occurred, in order to involve Doyle in a wholly separate action involving several other parties with whom Doyle has had no dealings whatsoever; and it appears from the record that the court used them for that purpose alone.
[2] Arthur’s first “objection” to the order was not made until more than three months after its entry—after Doyle filed her motion for default judgment.