Accounting Data, Inc. v. McMurtrie

• Decision Date: 17 May 1977
• Docket Number: No. 75-437,75-437
• Citation: 78 Wis.2d 89,253 N.W.2d 534
• Parties: ACCOUNTING DATA, INC., a Wisconsin Corporation, Respondent, v. Donald McMURTRIE and Colonial Builders & Supply, Ltd., a Wisconsin Corporation, Appellants.
• Court: Wisconsin Supreme Court

Page 534

253 N.W.2d 534

78 Wis.2d 89

ACCOUNTING DATA, INC., a Wisconsin Corporation, Respondent, v. Donald McMURTRIE and Colonial Builders & Supply, Ltd., a Wisconsin Corporation, Appellants.

No. 75-437.

Supreme Court of Wisconsin.

Submitted on Briefs March 30, 1977.

Decided May 17, 1977.

Kelley, Weber & Bolte, S. C., Wausau, on the brief, for appellants.

Tinkham, Smith, Bliss, Patterson & Richards, Wausau, on the brief, for respondent.

ABRAHAMSON, Justice.

The issue on appeal is whether McMurtrie, a resident of Florida, asserting a counterclaim in a Marathon County, Wisconsin, action, "instituted suit be means of his counterclaim" in Wisconsin so that he was subject to adverse examination in Marathon County pursuant to sec. 887.12(4), Stats. 1973. ¹

The plaintiff, Accounting Data, Inc., commenced its action against the defendants, Donald McMurtrie and Colonial Builders & Supply, Ltd., in Marathon County in March, 1974. McMurtrie and Colonial Builders answered and counterclaimed. Accounting's attorneys served upon McMurtrie's Wisconsin attorney a notice for an adverse examination of McMurtrie in the Marathon County Courthouse scheduled for March, 1975. McMurtrie's attorney advised Accounting's attorneys that he did not intend to produce McMurtrie for the adverse examination because McMurtrie had not instituted the litigation in Wisconsin and could not be forced to appear for examination in Wisconsin.

Accounting filed a motion asking the trial court to dismiss the defendants' counterclaim, or, in the alternative, to order McMurtrie to appear for an adverse examination in Wisconsin pursuant to subpoenas served on McMurtrie's attorney. The trial court found that by asserting the counterclaim, McMurtrie had instituted suit and thus was subject to examination in Wisconsin. The court agreed to sign an order requiring McMurtrie to appear for an adverse examination, and in the event he failed to appear, the court would strike the counterclaim.

The adverse examination did not take place; and three months later Accounting filed a second motion asking the court for an order setting a time for McMurtrie to appear for an adverse examination, or, in the alternative, for an order dismissing the defendants' counterclaim on the merits with prejudice. The court ordered McMurtrie to appear for an adverse examination in the Marathon County Courthouse on September 2, 1975, and further ordered that if McMurtrie failed to appear, the defendants' counterclaim would be dismissed on the merits with prejudice. On September 8, 1975, after being advised that McMurtrie had failed to appear for the adverse examination, the court entered the order dismissing the counterclaim on the merits with prejudice. From this order, McMurtrie and Colonial Builders & Supply, Ltd., have appealed.

Accounting argues that McMurtrie may be ordered to appear in Wisconsin for an adverse examination because by making a counterclaim McMurtrie "instituted suit" in Marathon County and under sec. 887.12(4), Stats.1973, he is subject to adverse examination in that county. McMurtrie contends that filing a counterclaim does not constitute instituting suit under the statute and, therefore, he is not required to appear in Wisconsin for an adverse examination.

The Court concludes that McMurtrie did not institute suit by asserting the counterclaim and, therefore, the circuit court's order must be reversed. The Court does not reach the second issue presented on this appeal, namely whether the circuit court abused its discretion when it dismissed the defendants' counterclaim with prejudice because McMurtrie failed to appear in Wisconsin for an adverse examination.

The word "suit" can be given a broad meaning. In Milwaukee L., H. & T. Co. v. Ela Co., 142 Wis. 424, 428, 125 N.W. 903, 905 (1910), the Court said that a suit in the broad sense "applies to any proceeding in a court of justice by which a party pursues the remedy which the law affords for litigating a subject of controversy between adverse parties . . . ." In In re Booth, 3 Wis. 1, 46 (39) (1854), the Court said:

"The interposition of the claim, by legal process, is the commencement of a suit. 'A suit is the prosecution of some claim, demand, or request.' 6 Wheat., 407. The trial of such claim is the trial of a suit."

A counterclaim is defined in the statutes as a claim the defendant has against the plaintiff upon which a judgment may be had in the action. Sec. 263.14(1), Stats.1973. Therefore, a counterclaim might be construed to be a suit.

The type of suit covered under sec. 887.12(4), Stats.1973, is limited, however, to that which is instituted. The word "instituted" is often used in reference to actions or proceedings which are started by the service of process. See Charles v. Fischer Baking Co., 182 A. 30, 14 N.J.Misc. 18, 21 (1935); Ocean Accident & Guaranty Corporation v. May, 15 S.W.2d 594, 597 (Tex.Com.App.1929); and Blain v. Blain, 45 Vt. 538, 543 (1873). In Wisconsin, at the time McMurtrie and Colonial Builders asserted their counterclaim, actions and special proceedings were commenced by the service of process. Sec. 262.02, Stats.1973. A summons had to be served in order to obtain jurisdiction over a defendant or a third party defendant. Sec. 262.02(1) and sec. 260.19(1), Stats.1973. However, no process had to be served to assert a counterclaim or a cross-claim; only the pleading need be served. Secs. 263.05, 263.14, and 263.15, Stats.1973.

As we interpret sec. 887.12(4), Stats.1973, nonresidents subject themselves to adverse examination in Wisconsin only by instituting suit, which means a suit started by the service of process. Because McMurtrie did not have to serve process in order to assert his counterclaim, he did not, under sec. 887.12(4), Stats.1973, institute suit when he asserted the counterclaim. Therefore, McMurtrie did not subject himself to adverse examination in Wisconsin.

This interpretation...