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COURT OF APPEALS
DECISION
DATED AND FILED
February 2, 2010
David
R. Schanker
Clerk of Court of Appeals
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NOTICE
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This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
Reports.
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
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Appeal No.
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STATE OF WISCONSIN
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IN COURT OF
APPEALS
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DISTRICT I
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Mark A. Perry,
Plaintiff-Respondent,
v.
Zurich Insurance,
a/k/a
Zurich American Insurance Company,
Defendant-Appellant.
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APPEAL
from an order of the circuit court for Milwaukee County: john
siefert, Judge. Reversed and
cause remanded with directions.
¶1 CURLEY, P.J. Zurich
Insurance, a/k/a Zurich American Insurance Company (Zurich) appeals from the
order denying its motion to reopen a default judgment in this small claims
action.
Zurich
contends that the trial court erroneously exercised its discretion when it
denied Zurich’s
motion to reopen the default judgment. Zurich argues that
pursuant to Wis. Stat. § 806.07(1)(a),
Zurich’s request to reopen the judgment should have been granted because the
failure of Zurich’s attorney to appear at the hearing on March 24, 2009, at
8:45 a.m., was a mistake caused both by the clerk’s office, which advised
the attorney’s office that the hearing was scheduled for 3:45 p.m., and by
a CCAP
entry that also reflected a hearing time of 3:45 p.m. As a result, the attorney’s failure to appear
constituted excusable neglect. Because
the trial court erroneously exercised its discretion in denying the motion to
reopen the default judgment, this court reverses the order and remands to the
trial court for an evidentiary hearing.
I. Background.
¶2 Mark A. Perry brought a small claims action against Zurich as a result of damages that he claimed occurred
when his semi-truck was towed away by Ray’s Towing, Zurich’s insured. Zurich’s
attorney filed a timely notice of retainer and an answer.
¶3 According to the affidavit submitted by Zurich’s attorney in support of the motion to
reopen the default judgment, the case was initially scheduled for a hearing on
September 30, 2008. The affidavit stated
that a temporary attorney in the law firm appeared at the September
proceeding. Based upon information
supplied by this temporary attorney,
the matter was adjourned to March 24, 2009, because one of Perry’s witnesses
did not appear. However, the parties
stipulated that the damages to Perry’s truck totaled $2,285.99. After the hearing, the temporary lawyer
supplied the law office with information that the hearing was scheduled to be
heard on March 24, 2009, at 8:45 a.m.
¶4 Upon taking over the case, the second Zurich attorney directed her paralegal to
prepare a subpoena for a witness. The
paralegal advised the attorney that she was unsure of what time to direct the
witness to appear because the time of the hearing supplied by the temporary
attorney conflicted with the time of the hearing shown on CCAP. Due to the conflict, the attorney asked the
paralegal to call the clerk of court’s office to confirm the time. The paralegal was told by the clerk of court’s
office that the hearing was scheduled for 3:45 p.m.
¶5 When the attorney appeared on March 24, 2009, at 3:45 p.m.,
she was told that the case had been called at 8:45 a.m. and that a default
judgment in favor of Perry had been entered.
After the attorney explained that she had relied on the time given by
the CCAP entry, the court clerk looked the case up on CCAP and acknowledged
that the incorrect time was listed. The
attorney then promptly filed a motion seeking to reopen the default judgment. Believing that the mistake in times occurred
due to the Zurich’s
attorney’s office “downsiz[ing],” the trial court denied the motion.
II. Analysis.
¶6 Zurich
argues that it was entitled to have the default judgment reopened because “the
default judgment was obtained as a result of both a mistake by the court staff
and excusable neglect by defense counsel.”
This court agrees.
¶7 A trial court determination to deny or grant a motion seeking
to reopen a default judgment is a discretionary act. Dugenske v. Dugenske, 80 Wis. 2d 64, 68, 257
N.W.2d 865 (1977). Before a party is
entitled to relief from a default judgment, the party must show that the
judgment was a product of mistake, inadvertence, surprise or excusable neglect
on his or her part and that a meritorious defense to the action exists. Hansher v. Kaishian, 79 Wis. 2d 374, 389, 255
N.W.2d 564 (1977). The burden is on the
movant to show that one of the requisite conditions exists such that the
defendant is entitled to relief from the default judgment. Wis.
Stat. § 806.07(1)(a); Carmain v. Affiliated Capital Corp.,
2002 WI App 271, ¶23, 258 Wis. 2d 378, 654 N.W.2d 265.
¶8 “Mistake is defined as an ‘error or a fault resulting from
defective judgment, deficient knowledge, or carelessness,’ or a ‘misconception
or misunderstanding.’” Wisconsin
Cent. Ltd. v. DOR, 2000 WI App 14, ¶11, 232 Wis. 2d 323, 606 N.W.2d 226 (quoting American Heritage College Dictionary
873 (3d ed. 1993)). “‘Excusable neglect
is that neglect which might have been the act of a reasonably prudent person
under the circumstances.’” Hansher,
79 Wis. 2d
at 391 (citation and one set of quotation marks omitted). In determining whether to reopen a default
judgment the trial court should consider whether the defaulting party acted
promptly, whether the default judgment imposes excessive charges, and whether the
default judgment would result in a miscarriage of justice. Dugenske, 80 Wis. 2d at 68-69.
¶9 A trial court’s discretion contemplates an exercise of
judicial judgment based on three factors: (1) the facts of record; (2) logic; and (3)
the application of proper legal standards. Shuput v. Lauer, 109 Wis. 2d 164,
177-78, 325 N.W.2d 321 (1982). “We will
not reverse a discretionary determination by the trial court if the record
shows that discretion was in fact exercised and we can perceive a reasonable
basis for the court’s decision.” Prahl
v. Brosamle, 142 Wis. 2d
658, 667, 420 N.W.2d 372 (Ct. App. 1987).
¶10 Against this backdrop, this court examines the trial court’s
reasoning. At the motion seeking to
reopen the default judgment, the trial court, referencing a comment made by Zurich’s attorney as to
why she was not present at the first hearing, remarked:
If they [the law firm] want to downsize their staff to
the point that they don’t make their court appearances, why should the judges
reopen their default judgments and take away this guy’s judgment for the
stipulated $2,285?
Later, when the
attorney argued that her failure to appear was a result of excusable neglect,
the trial court stated: “I don’t see
that.” The trial court then denied the
motion. Given the trial court’s comments, this court
concludes that the trial court erroneously exercised its discretion in denying
the motion because the trial court erred in determining the reason for the
mistake.
¶11 The facts are that after taking over the case from a temporary attorney
in the firm, the second attorney for Zurich
encountered a conflict between the time of the hearing calendared by the former
attorney and the time reflected on CCAP.
This court can take judicial notice that CCAP supplies information that
is routinely relied upon by courts, litigants and attorneys. Unwilling to simply depend on the accuracy of
the CCAP entry, the attorney directed her paralegal to call the clerk of court’s
office. The paralegal called and was
told that the hearing was scheduled for 3:45 p.m.
¶12 The actions taken by Zurich’s
attorney in establishing the correct time for the hearing were eminently
reasonable. Not only did the attorney
not rely on the CCAP entry, she took the additional step of having her
paralegal call the clerk’s office and confirm the time of the hearing. Short of going to the courtroom and looking
at the court’s own calendar, the attorney did all that she could to establish
the correct time for the hearing. The mistake
here was made by the court system. The “‘deficient
knowledge’” of the clerk’s office as to the correct time of the hearing was
imparted to the attorney. See Wisconsin Cent. Ltd., 232 Wis. 2d 323, ¶11 (citation omitted). Given the mistake by the court system, the
next question to be answered is whether the attorney’s conduct in failing to
attend the hearing in the morning constituted excusable neglect. Contrary to the trial court’s finding, this
court concludes it did.
¶13 As noted, excusable neglect is “‘that neglect which might have
been the act of a reasonably prudent person under the circumstances.’” Hansher, 79 Wis. 2d at 391 (citation omitted). Certainly a reasonably prudent person would
have failed to appear at the hearing date in the morning after reviewing CCAP
and further being advised by the clerk of court’s office that the time of the
hearing was in the afternoon.
¶14 Support for this conclusion can also be found in case law. In Edland v. Wisconsin Physicians Service Insurance
Corp., 210 Wis. 2d
638, 563 N.W.2d 519 (1997), the supreme court concluded that the trial court’s
failure to give the parties notice of the initial final order constituted a
“mistake” under Wis. Stat. § 806.07(1)(a). Edland, 210 Wis. 2d at 648. Similarly, in Arents v. ANR Pipeline Co.,
2005 WI App 61, 281 Wis. 2d 173, 696 N.W.2d 194, the clerk’s advice to the
attorneys that the judgments had not been entered, when in fact another clerk
had entered the judgments, was found to be a mistake that required the reopening
of the judgments. Id., ¶¶59, 72-73.
¶15 The trial court believed that the mistake occurred because the
law firm had “downsize[d],” resulting in two different attorneys attending two
proceedings. However, the mistake had
nothing to do with “downsizing.” The
mistake occurred because some unknown person entered the wrong time of the
hearing into CCAP. Had the temporary
attorney continued on the case, he may well have called the clerk’s office to
confirm the date he wrote down or consulted CCAP. He, too, would have been given the incorrect
information.
¶16 Here, the attorney promptly filed a motion to reopen. Permitting the default judgment to stand when
it was the court system that provided the wrong information is a miscarriage of
justice. In addition, Zurich’s pleadings reveal a meritorious
defense: namely, that Perry’s damages
were caused by the negligence of another.
See J.L. Phillips & Assocs., Inc. v. E & H Plastic Corp.,
217 Wis. 2d 348, 363, 577 N.W.2d 13 (1998) (“[A] meritorious defense is a
defense good at law that requires no more and no less than that which is needed
to survive a motion for judgment on the pleadings.”). Zurich
represents that it was prepared to present witness testimony to rebut Perry’s
allegations that the tow of his truck caused damage. Accordingly, the order denying the reopening
of the default judgment is reversed and the cause is remanded. The trial court is also directed to obtain
any monies paid to Perry and have such sums held by the clerk’s office until
the matter is resolved.
By the Court.—Order reversed and cause
remanded with directions.
This
opinion will not be published. See Wis.
Stat. Rule 809.23(1)(b)4.