Maier Const., Inc. v. Ryan, 75-761
| Decision Date | 03 January 1978 |
| Docket Number | No. 75-761,75-761 |
| Citation | 81 Wis.2d 463,260 N.W.2d 700 |
| Parties | MAIER CONSTRUCTION, INC., a Wisconsin Corporation, Respondent, v. Richard L. RYAN, Appellant. |
| Court | Wisconsin Supreme Court |
Eugene A. Kershek, Milwaukee, on the brief for appellant.
Richard D. Finley, Milwaukee, on the brief for respondent.
On November 10, 1975, Richard L. Ryan was served with a summons and complaint by Maier Construction, Inc. The complaint demanded judgment on two causes of action. The first cause of action asked for $1,032.56 for labor and materials used in repairing Ryan's house. The second cause of action demanded that $1,200 be paid for an estimate which Maier made for repairs allegedly necessary to permanently restore Ryan's property, which had been damaged by fire. The next day, Ryan, who was not a lawyer, mailed a personal letter to the attorney for Maier Construction, Inc. The letter began as follows:
The letter went on to state Ryan's position in regard to the merits of the plaintiff's complaint. He claimed that he had not agreed to pay any sum for an estimate in respect to any further repairs. He stated, however, that he had no disagreement with the plaintiff's claim for $1,032.56 for the temporary repairs. He also stated in that letter that he had not retained an attorney to represent him in the lawsuit.
Subsequently, the attorney for Maier Construction applied for a default judgment, and on January 19, 1976, filed an affidavit stating that no answer had been filed by Ryan or his attorney and that the time for answering had expired. Maier's attorney did not refer to the letter he had received from Ryan, and no notice of the application for judgment was served on Ryan. A default judgment was entered on January 19, 1976, and a notice of entry of the judgment dated January 20, 1976, was served on Ryan.
By motion dated February 10, 1976, Ryan, appearing by counsel, petitioned the court to vacate the judgment pursuant to sec. 806.07, Stats., on the grounds of excusable neglect, mistake, inadvertence, and surprise. A proposed answer was attached to Ryan's motion papers.
On March 1, 1976, the motion to vacate the judgment was denied. An appeal from the order denying the motion to vacate has been taken to this court.
The general question presented on this appeal is whether a lay person's letter to a plaintiff's attorney, which letter on its face recites that it is an answer to a summons and complaint, addresses itself to the merits of the complaint, and explains why the defendant concludes that he is not liable, should be treated as a general appearance, which requires the plaintiff to give notice of a motion for a default judgment. In addition, we are presented with the question of whether, under the circumstances, the failure to file a formal verified answer constitutes an excusable neglect or mistake which should entitle the defendant, once the judgment is entered, to have that judgment vacated.
Two statutes are of importance under the facts.
Sec. 806.02(1), Stats. (1975), provides that:
Sec. 806.07, Stats. (1975), provides:
Although this action was commenced prior to the effective date of the Code of Civil Procedure presently in effect, the present code is applicable under the provisions of sec. 801.01(3)(b), Stats., because the action was pending on January 1, 1976, the effective date of the revised Code of Civil Procedure.
Pursuant to sec. 806.02(1), Stats., quoted above, Ryan's attorney, at the hearing on the motion to vacate the judgment, contended that his client had made an appearance by virtue of the letter and was entitled to receive notice of the plaintiff's application for a default judgment. We agree with that contention, because, at the very least, defendant's letter to the plaintiff's attorney constituted an appearance.
In Hansher v. Kaishian, 79 Wis.2d 374, n. 7, 255 N.W. 564 (1977), this court discussed circumstances under which an appearance could be made by a defendant who sent a letter to plaintiff's attorney, when the letter made it clear that the defendant intended to contest the allegations of the complaint. For reasons peculiar to the facts, in Hansher we concluded that no appearance was made as the result of the defendant's letter; but the discussion in Hansher made it clear that, on the basis of prior Wisconsin cases, a letter expressly referring to the summons and showing that a defendant considered himself actively participating in the case constituted an appearance entitling that defendant to a notice of application for default.
Under a similar federal provision (Fed.R.Civ.P. 55(b)(2)), it was held that notice must be given to one who has appeared in an action, even though that appearance was not made by the filing of a formal pleading. Once a party has indicated that he has a clear purpose to defend himself, he is entitled to notice of a motion for default judgment. United States v. One 1966 Chevrolet Pickup Truck, 56 F.R.D. 459 (E.D.Tex.1972).
Also, in H. F. Livermore Corp. v. Aktiengesellschaft Gebruder Loepfe, 139 U.S.App.D.C. 250, 432 F.2d 689 (1970), it was held, under the federal rule, that a defendant had "appeared" in the action and was entitled to notice of application for default judgment when the attorneys for the parties had engaged in telephone and letter exchanges and neither was in doubt that the suit would be contested if a settlement could not be reached.
In the instant case, the defendant Ryan stated that his letter was in answer to the summons. He made specific reference to it and indicated that he considered himself an active participant in the case. Under the language of Hansher and under the rationale of the federal cases, we conclude that Ryan's letter to counsel for Maier constituted an appearance which entitled him to notice of the application for default judgment.
The failure to give notice to one who has appeared in an action does not go to the jurisdiction of a court which purports to enter a default judgment, and a judgment entered without notice is not ipso facto void. Federal Land Bank of St. Paul v. Olson, 239 Wis. 448, 1 N.W.2d 752 (1942). However, as Hansher indicated, the failure to give notice can serve as the basis for vacating the judgment on a motion subsequently brought.
It should also be pointed out that the giving of notice to one who has appeared, even though he be in technical default, would serve the purpose of bringing to the court forthwith any defenses which a defendant might have that would enable him then to file a formal pleading and to forestall and obviate the necessity of subsequent motions to vacate the judgment.
Had a proper notice been given to Ryan at the time of the application for the default judgment, the problem of whether to vacate the judgment at a subsequent time probably could have been avoided.
While we conclude that a notice of application for the default judgment should have been served upon Ryan, the judgment is not void for that reason. While the document mailed to the attorney for Maier Construction, Inc., was denominated as an answer, it clearly was not one in the technical sense envisaged by the pleading statutes. Ryan was mistaken in his belief that an answer in letter form constituted a proper responsive pleading. He neglected to serve and file a verified answer, which the statutes called for.
Under sec. 806.07, Stats., the question addressed to the court on the motion to vacate the judgment was whether that mistake and that neglect were excusable. For a defendant to be entitled to relief, he must not only demonstrate that the judgment against him was obtained as the result of excusable mistake, inadvertence, surprise, or neglect, but also that he has a meritorious defense to the action. Hansher, supra, 79 Wis.2d at 389, 255 N.W. 564.
In the instant case, at the time when the defendant moved to vacate the judgment, he appeared with an attorney and appended to his motion papers was a proposed answer, which concededly poses at least an arguably meritorious defense. Accordingly Ryan has made a sufficient showing in that respect. He also moved promptly in seeking a vacation of the judgment; and, as we said in Hansher, supra, at 392, 255 N.W. 564 the prompt action of a defendant in seeking the vacation of a default judgment is a factor to be considered.
Basically, however, the vacation of a default judgment is addressed to the sound discretion of the trial court, and this court will not set aside a trial court's determination unless there is a clear abuse of discretion. In the exercise of that discretion, we have said in Dugenske v. Dugenske, 80 Wis.2d 64, 68, 257 N.W.2d 865 (1977), that three factors should be borne in mind by the trial judge: (1) that the statute relating to the vacation of default judgments is remedial in nature and, therefore, it should be liberally construed; (2) that the general policy of the law favors giving litigants their day in court with an opportunity to try the issues; and...
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