Edland v. Wisconsin Physicians Service Ins. Corp.

Decision Date12 June 1997
Docket NumberNo. 96-1883,96-1883
Citation563 N.W.2d 519,210 Wis.2d 638
PartiesCarole F. EDLAND, Dr. Robert W. Edland and Economy Preferred Insurance Company, Plaintiffs-Appellants, v. WISCONSIN PHYSICIANS SERVICE INSURANCE CORPORATION, Defendant-Respondent.
CourtWisconsin Supreme Court

For the plaintiffs-appellants there was a brief (in the Supreme Court) by Robert D. Johns, Jr. and Johns & Flaherty, S.C., La Crosse.

For the defendant-respondent there was a memorandum (in the Court of Appeals) by Terry J. Booth and Fellows, Piper & Schmidt, Milwaukee.

¶1 ANN WALSH BRADLEY, Justice

The court of appeals, by certification, asks us to determine whether the circuit court may extend the statutory time to appeal by vacating and reentering an order which it intended but failed to mail to the parties. Although the parties stipulate that the circuit court may vacate and reenter its order in this case, the court of appeals has raised the issue on its own. We conclude that when the record demonstrates the circuit court's intention to send notice of an order to the parties, and the court subsequently acknowledges its mistake in failing to send such notice, it may effectively extend the time to appeal by vacating and reinstating its unnoticed order. Accordingly, without reaching the substantive issues raised in this case, we affirm the order of the circuit court which vacated and reinstated the October 9, 1995 order.

¶2 The relevant facts are procedural in nature, and are not in dispute. The plaintiffs, Carole F. Edland, Robert W. Edland, and Economy Preferred Insurance Company (EPIC), filed a declaratory judgment action seeking a determination of the subrogation rights of the defendant, Wisconsin Physicians Service Insurance Corporation, to the Edlands' underinsured motorist coverage provided by EPIC.

¶3 On October 9, 1995, the La Crosse County Circuit Court, John J. Perlich, Judge, entered a "Memorandum Decision and Order" addressing the substantive issues in this case. 1 At the end of the order appeared the following:

cc: Attorney Robert D. Johns, Jr.

Attorney Terry J. Booth

Despite its contrary intention, the circuit court did not mail the order to the above-named attorneys. 2 Only after the 90-day statutory time limit for appeal passed did the parties and their attorneys become aware of the earlier entry of the order. 3

¶4 Within two months of learning of the entered order, the plaintiffs filed a motion requesting that the circuit court vacate and reinstate the October 9, 1995 order pursuant to Wis. Stat. § 806.07(1)(a). 4 The defendant did not oppose the motion. The court granted the motion to vacate and reenter the order, stating that it had mistakenly failed to send the decision and order to the parties, that both parties agreed on the relief to be granted, and that the relief was appropriate because the mistake was committed by the court rather than the parties. A written order was entered the following day, and judgment was entered on June 26, 1996. The plaintiffs then appealed the circuit court's order addressing the substantive issues in this case.

¶5 In a sua sponte review of its jurisdiction, the court of appeals directed the parties to submit memoranda addressing whether the plaintiffs' failure to file a timely appeal from the circuit court's October 9, 1995 order deprived the court of appeals of jurisdiction over the appeal. After the parties submitted memoranda on the issue, the court of appeals certified the case to this court.

¶6 This court takes a slightly different view of the issue on appeal from that certified by the court of appeals. 5 We see the question as follows: If the record demonstrates that the circuit court intended to send notice of an order to the parties, and the court subsequently acknowledges its failure to carry out its earlier expressed intention, may the court effectively extend the time to appeal by vacating and reinstating its unnoticed order under § 806.07(1)(a)?

¶7 Rulings on motions under § 806.07 are reviewed under an erroneous exercise of discretion standard. State ex rel. M.L.B. v. D.G.H., 122 Wis.2d 536, 541, 363 N.W.2d 419 (1985). A court erroneously exercises its discretion when its decision is based upon an error of law. Id. at 542, 363 N.W.2d 419. Applying that standard to this case, we will uphold the circuit court's grant of the plaintiffs' motion under § 806.07(1)(a) if the statute authorizes relief from an order for the reasons provided by the circuit court. This court interprets a statute under a de novo standard, without deference to the decision of the court of appeals or circuit court. Stockbridge School Dist. v. DPI, 202 Wis.2d 214, 219, 550 N.W.2d 96 (1996).

¶8 Section § 806.07 attempts to achieve a balance between fairness in the resolution of disputes and the policy favoring the finality of judgments. State ex rel. M.L.B, 122 Wis.2d at 542, 363 N.W.2d 419 (citing Graczyk, The New Wisconsin Rules of Civil Procedure, Chapters 805-807, 59 Marq.L.Rev. 671, 727 (1976)). The statute enhances fairness in the administration of justice by authorizing a circuit court to vacate judgments on various equitable grounds. Section 806.07(1)(a) furthers the policy favoring finality by limiting the time period for motions under that section to the shorter of one year or a reasonable amount of time after a judgment or order is entered. See § 806.07(2); Rhodes v. Terry, 91 Wis.2d 165, 171, 280 N.W.2d 248 (1979).

¶9 By including at the end of the October 9, 1995 order a carbon copy signal naming the parties' attorneys, the circuit court evinced in the record an intent to send notice of the order to the parties. There is no dispute that the court mistakenly failed to carry out its intent to provide such notice. The order vacating and reinstating the original order provides:

A copy of the order was to be sent to both counsel. Through an oversight, it was not. Accordingly, the parties have asked that this Court vacate that order and reinstitute the order as of this date, so that various appellate issues can be eliminated. Such an order is appropriate since the mistake was the Court's, not the parties, and since both parties have stipulated.

¶10 In light of the circuit court's intention, reflected in the record, to send notice of its decision and order to the parties, and its subsequently acknowledged mistake in failing to send the notice, we conclude that such failure constitutes a "mistake" for purposes of § 806.07(1)(a). 6 As noted in the request for certification, however, there are prior decisions of the court of appeals which arguably preclude the circuit court from effectively extending the time to appeal by vacating and reinstating an order under § 806.07(1)(a).

¶11 In Eau Claire County v. Employers Ins., 146 Wis.2d 101, 430 N.W.2d 579 (Ct.App.1988), the circuit court entered separate judgments dismissing the plaintiff's claims against its insurers. The first judgment was entered on June 25, 1987, and dismissed the plaintiff's claims against Insurer A. Id. at 106, 430 N.W.2d 579. Insurer A notified the plaintiff of the judgment, and the plaintiff was thereby required to file a notice of appeal within 45 days of entry of judgment. See § 808.04(1). The second judgment was entered on July 20, and dismissed the plaintiff's claim against Insurer B. Insurer B also notified the plaintiff of the entry of judgment. Laboring under the erroneous belief that the two judgments had to be combined in a single appeal, the plaintiff waited until August 14 to file a notice of appeal from both the June 25 and July 20 judgments.

¶12 Insurer A filed a motion to dismiss the appeal based upon the plaintiff's failure to file within 45 days of the June 25 judgment. The plaintiff then filed in the circuit court a motion to vacate the earlier judgments, which the court granted under § 806.07(1)(h). Eau Claire County, 146 Wis.2d at 108, 430 N.W.2d 579. The circuit court later entered a consolidated judgment similar in substance to the earlier judgments. Insurer A appealed.

¶13 The court of appeals held that the circuit court erroneously exercised its discretion in granting the plaintiff's motion to vacate. The court reasoned:

Under the circumstances, therefore, we conclude that sec. 806.07(1)(h) does not authorize the trial court to essentially expand the time for appeal when the time for such appeal ha[s] passed. We do not decide whether § 806.07(1)(h) may be used under some other set of facts to consolidate separate judgments outside the specified time limits. However, insufficient cause is offered in the present case to justify an exception to the strong policy behind the finality of judgments. The inaction and assumptions relied upon are far from the "extraordinary circumstances" recognized as a basis for reopening a final judgment under sec. 806.07(1)(h), and do not justify the court stepping in to mitigate the situation.

Id. at 111, 430 N.W.2d 579.

¶14 The Eau Claire County court did not create a blanket proscription against extending the time to appeal by vacating and reinstating a judgment. Indeed, such a proscription would be inconsistent with the normal operation of the statute, since vacating an order and entering another will invariably start anew the time period for appeal.

¶15 The instant case presents facts different from those in Eau Claire County. In Eau Claire County, the plaintiff received notice of the judgment well before the expiration of the appeal period. Here, none of the parties had notice of the order until after the appeal period expired. In Eau Claire County, the plaintiff's misunderstanding of procedure resulted in a failure to file a timely notice of appeal. Here, the record demonstrates, and the circuit court has acknowledged, that the plaintiffs' failure to file a timely notice of appeal was the result of the court's error alone. We conclude that these factual distinctions render Eau Claire County...

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