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COURT OF APPEALS DECISION DATED AND RELEASED March 28, 1996 |
NOTICE |
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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. |
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official Reports. |
No. 95-0995
STATE
OF WISCONSIN IN COURT OF
APPEALS
DISTRICT IV
JACQUIE HUR,
Plaintiff-Appellant.
v.
MICHAEL R. GARVIN,
JUDITH A. GARVIN
and BANK ONE,
JANESVILLE NA
F/K/A FIRST PEOPLES
BANK
and MARINE FIRST
NATIONAL BANK,
Defendants-Respondents.
APPEAL from a judgment
of the circuit court for Rock County:
PATRICK J. RUDE, Judge. Affirmed
in part; reversed in part.
Before Eich, C.J.,
Gartzke, P.J., and Sundby, J.
PER
CURIAM. Jacquie Hur appeals from a judgment dismissing, for
failure to prosecute, her action against Michael R. Garvin and Judith A.
Garvin, and granting the Garvins' counterclaims. We affirm dismissal of the action, but reverse the order granting
the counterclaims.
Hur filed her complaint
in July 1992 and an amended complaint in August 1992. She alleged the Garvins executed a promissory note to her in
1976, and executed and delivered their
mortgage as collateral for the note in 1979.
Hur alleged the Garvins were in default. She sought judgment of foreclosure, sale of the mortgaged
premises and payment of the amount due on the note.
The Garvins
counterclaimed. They alleged that when
the note was executed, Hur and her husband, attorney and agent Ken Hur, were
motor vehicle dealers or salespersons regulated by § 218.01, Stats., and subject to the Wisconsin
Consumer Act, chs. 421 to 427, Stats.
The Garvins alleged the original note
and a mortgage note modification in 1981 violated those statutes, making the
note and mortgage unenforceable. They
sought money damages.
Hur moved for summary
judgment in December 1992. The motion
was denied orally in February 1993 and by order in March 1993. Hur's counsel moved to withdraw
approximately seventeen months later in August 1994. The motion was granted and Ken Hur became the attorney of
record. In a letter to the court dated
September 12, 1994, Attorney Hur stated that former counsel "misunderstood
my wife[']s intention and inadvertently let this matter drag believing it was
capable of settlement. He was in
error." Attorney Hur stated he met
with the Garvins' attorney and rejected their settlement offer. He asked that the case be set for trial.
On September 23, 1994,
the Garvins moved to dismiss for failure to prosecute. The motion was accompanied by their
attorney's affidavit which stated they made a settlement offer "shortly
after" the summary judgment motion was denied, in February 1993, but Hur
did not respond until September 1994.
Now represented by
another attorney, Hur filed an "opposition" to the dismissal motion
in November 1994. The document did not
account for the delay in the litigation, other than to say counsel
"engaged in settlement discussions" after the summary judgment motion
was denied. It stated that Hur's
activities showed continued prosecution of the matter, "in spite of
apparent difficulties with former counsel and the like."
The court held a hearing
on the motion in November 1994. The
Garvins' attorney disputed there had been "settlement discussions,"
and stated there had only been his letter which went unanswered until September
1994. Hur's counsel was unable to
explain the delay in prosecuting the case, but argued it was not so extreme as
to warrant dismissal.
The court orally granted
the motion, stating in part:
The court is of the opinion that the
plaintiff ... has been derelict in pursuing its rights and remedies in this
matter .... [T]he court finds that
there was no proper prosecution of this matter ....
The previous attorney resigned. We know not the reason why from this record,
but clearly there was a failure of the plaintiff to pursue their claim for an
extended period of time.... [C]ertainly
failure to prosecute a case of a year or more indicates to the court that the
matters are not going to be pursued, and all it takes is -- in those cases is
for the court to find some reason to not dismiss, and I'm very liberal in that,
as I think the court should be.
This
is not the case. There was no request,
no reports, no nothing for an extended period of time, so your motion is
granted....
The
court's order entered on November 21, 1994, also granted judgment in the
Garvins' favor on their counterclaim.
The order declared void and invalidated Hur's mortgage.
Hur moved for
reconsideration in December 1994. The
factual basis for the motion was to be "elaborated in the Affidavits to be
submitted to the Court prior to hearing on the Motion." Hur's counsel later filed an affidavit
stating he requested an affidavit by Attorney Hur and received a letter in
response, which counsel believed "fully states" the position of
Jacquie Hur on the reconsideration motion.
At the hearing on the
motion in February 1995, plaintiff Hur sought to present the testimony of
Attorney Hur and her original attorney.
The Garvins objected because there had been no notice that witnesses
would be presented. The court declined
to allow the testimony and confirmed its original order. Hur appeals.
The trial court may
dismiss an action for failure to prosecute.
Section 805.03, Stats. The court may make such orders as are
just. Id. For a decision under this section to be sustained,
there must be a reasonable basis for the trial court to determine that the
party's conduct was egregious and there was no clear and justifiable
excuse. Johnson v. Allis Chalmers
Corp., 162 Wis.2d 261, 276-77, 470 N.W.2d 859, 865 (1991). The decision to dismiss is discretionary,
and one which we will affirm if the court examined the relevant facts, applied
a proper standard of law and reached a conclusion a reasonable judge could
reach. Johnson, 162
Wis.2d at 273, 470 N.W.2d at 863.
Hur argues the court
erred by not considering whether her conduct was egregious. However, an implicit finding of
egregiousness is sufficient if the facts provide a reasonable basis for the
court's conclusion. Schneller v.
St. Mary's Hosp., 162 Wis.2d 296, 311, 470 N.W.2d 873, 878-79
(1991). Such a finding was implied by
the court's comments when granting the motion.
Hur argues the record
does not support a finding of egregiousness.
We disagree. A reasonable judge
could conclude a delay of nearly nineteen months, combined with failure to
respond to a settlement offer, is egregious conduct.
Hur argues the court
erred by rejecting the testimony she offered at the reconsideration
hearing. The trial court has discretion
as to the nature of proof that may be presented, including whether to permit
witnesses to testify. Honeycrest
Farms, Inc., v. A.O. Smith Corp., 169 Wis.2d 596, 604, 486 N.W.2d 539,
542 (Ct. App. 1992). Because Hur
provided no notice that witnesses would be presented, and because Hur had
previously stated information would be supplied before the hearing by
affidavit, the court properly declined to allow the witnesses to testify.
Hur argues there was
confusion about the scheduling of a pre-trial conference that was to occur
after denial of the summary judgment motion.
However, Hur could certainly have requested such a conference or
inquired as to its status.
Hur argues the court
should have considered the "mutual ongoing settlement efforts." The record contains no indication there were
settlement efforts other than the Garvins' long-unanswered offer.
Hur argues the court
should have considered "the apparent problems" between her and her
original attorney. We disagree. "Ultimately, when an attorney's egregious
failure to obey court orders implicates the court's ability to administer
judicial business, it is more equitable to allow the adverse consequences to
fall upon ... the party who has chosen the attorney, rather than on the
adversary...." Johnson,
162 Wis.2d at 285, 470 N.W.2d at 868.
Hur argues dismissal of
her case is not "just," as required by § 805.03, Stats.
She argues the Garvins acquiesced in the delay and could have moved the
case forward at any time. However, it
is not the defendants' obligation to prosecute the plaintiff's case. She argues dismissal offends the public
policy favoring trial on the merits.
The "egregiousness" requirement functions to balance that
policy against other important public policies such as judicial efficiency and
timely resolution of disputes.
For these reasons, we
conclude the court properly dismissed Hur's claims.
Hur also argues the
court erred by granting judgment on the Garvins' counterclaim and voiding the
mortgage. We agree. We are aware of no law which requires a
court to grant judgment on a defendant's counterclaim when dismissing the
plaintiff's complaint for failure to prosecute. We see no reason why that should occur here. The Garvins did not pursue their counterclaim
any more than Hur pursued her complaint.[1]
By the Court.—Judgment
affirmed in part and reversed in part.
Costs awarded to the respondents.
This opinion will not be
published. See Rule 809.23(1)(b)5, Stats.