Rhodes v. Terry, 76-661

• Decision Date: 29 June 1979
• Docket Number: No. 76-661,76-661
• Parties: Allen E. RHODES and Raye Rhodes, his wife, Plaintiffs-Respondents, v. Dr. John W. TERRY, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 248

280 N.W.2d 248

91 Wis.2d 165

Allen E. RHODES and Raye Rhodes, his wife, Plaintiffs-Respondents, v. Dr. John W. TERRY, Defendant-Appellant.

No. 76-661.

Supreme Court of Wisconsin.

Submitted on Briefs May 31, 1979.

Decided June 29, 1979.

Wilson, Broadnax & Owens, Milwaukee, submitted brief for defendant-appellant.

John A. Udovc, Milwaukee, submitted brief for plaintiffs-respondents.

COFFEY, Justice.

This is an appeal from an order denying the defendant-appellant's motion to vacate a default judgment and for permission to answer and defend the plaintiffs-respondents' complaint on its merits. The plaintiffs-respondents in this case are husband and wife. At the time of the incident, Allen Rhodes, age 24, was a student draftsman attending the Milwaukee Area Technical College and employed by the Allis-Chalmers Corp. as an apprentice welder. Mr. Rhodes was under the medical care and treatment of the defendant-appellant, Dr. John W. Terry, a physician-surgeon.

The plaintiff's complaint alleges the following: On October 2, 1974 the defendant, Dr. Terry, treated the plaintiff, Allen Rhodes, for an abscess or cyst in his right armpit (axilla). The defendant performed an operation on Allen Rhodes to drain the abscess. As a result of the surgical probing in the operation, the plaintiff's right axillary artery was damaged and weakened, causing an aneurysm to form in the artery. On October 18, 1974 the defendant again treated the plaintiff, Allen Rhodes, and diagnosed the aneurysm as a recurrence of the abscess and once more proceeded to drain it surgically. The second operation resulted in the piercing and hemorrhaging of the axillary artery. Another surgeon, Dr. Ghosh, was called in consultation to stop the hemorrhaging and a third doctor, a plastic surgeon, was thereafter summoned to repair the artery with a saphenous graft.

The plaintiffs, by their attorney, commenced this action with the service of a summons on the defendant on November 25, 1975 and filed with the court on February 18, 1976. At that time in 1975, prior to the enactment of the new Rules of Civil Procedure (effective January 1, 1976) an action was commenced by service of a summons on the defendant, pursuant to sec. 262.02, Stats. (1973).

The summons served on Dr. Terry stated that the defendant was summoned and required to serve upon John A. Udovc, plaintiffs' attorney, a demand for a copy of the complaint within twenty (20) days after service of the summons. The summons also recited that the defendant's failure to demand a copy of the complaint from the attorney would result in a judgment being rendered against him according to the demand in the complaint.

The complaint filed on February 18, 1976 alleged that the defendant doctor was negligent and had failed to exercise the customary degree of skill and care employed by doctors in the community and specifically set forth the following acts of negligence:

(a) He failed to properly diagnose the degree of cyst involvement;

(b) He gave plaintiff improper advice which he relied on until it was too late to prevent permanent loss of structure and function of his right axilla, brachial plexus, and adjacent blood vessels and muscles;

(c) He failed to treat plaintiff for the axillary aneurysm which resulted from the first operation;

(d) He failed to follow up plaintiff's case to make sure he was being properly treated;

(e) He neglected removing the hematoma for so long that permanent damage was done to the muscle and fascia and vascular and nerve supply of the right shoulder, chest, and arm;

(f) He abandoned treatment of plaintiff, so that although plaintiff underwent two (2) additional operations by other surgeons, he has been left with arm impairment.

The co-plaintiff, Raye Rhodes, alleged that defendant's negligence was the proximate cause of her loss of society, companionship and service of her husband.

On June 14, 1976, after more than twenty (20) days had elapsed since the date of service of the summons and the defendant having failed to answer or respond, the plaintiffs moved the court for entry of a default judgment. The trial court entered default judgment in favor of the plaintiffs on June 15, 1976. The notice of entry of judgment, together with a copy of the plaintiffs' complaint, was served on the defendant on June 22, 1976.

On January 11, 1977, over six months later, the defendant's attorney filed a motion to vacate the default judgment, pursuant to sec. 806.07, Wis.Stats., together with an affidavit supporting the motion. The defendant's motion was based on the grounds of " . . . mistake, inadvertence, surprise, and excusable neglect . . . ." The plaintiffs filed an affidavit in opposition to defendant's motion.

A hearing was held on the defendant's motion to vacate the judgment on February 21, 1977. The trial judge, in an order from the bench denying the defendant's motion to vacate the default judgment, stated that the defendant had not demonstrated good cause for vacating the judgment. The court noted the following factors in support of its ruling: (1) Dr. Terry's ability to read the plain wording of the summons and his failure to respond accordingly; (2) the efforts made by plaintiff's counsel to contact the doctor by numerous phone calls and letters prior to entry of the default judgment; (3) the failure of the defendant to bring the motion until some thirteen (13) months after the service of the original summons; more specifically, a period of seven (7) months from the date he originally received notice of the action by summons and then an additional period of more than six (6) months after the entry of default judgment; (4) the defendant's knowledge of the court system gained through the experience of numerous other lawsuits filed against him. The court, in a written order dated May 9, 1977, dismissed the defendant's motion to vacate the default judgment and the defendant now appeals from the order.

ISSUE:

Did the trial court abuse its discretion in ruling under the facts and circumstances of this case that a delay of six months in filing a motion to vacate a default judgment exceeded the statutory intent of the "reasonable time" requirement although filed within the maximum one-year time limit for filing a motion, pursuant to sec. 806.07(1)(a), Stats.?

The defendant seeks to vacate the earlier default judgment entered against him and permission to answer and defend the plaintiffs' complaint on the merits. The defendant relies on sec. 806.07(1)(a), Wis.Stats., which reads as follows:

"(1) On Motion and upon such terms as are just, the court may relieve a party or legal representative from a judgment, order or stipulation for the following reasons:

"Mistake, inadvertence, surprise, or excusable neglect; . . ."

However, in seeking to vacate a default judgment pursuant to sec. 806.07(1) (a), Stats., the new statute requires it be brought within a "reasonable time" and specifically no later than one year after entry of judgment. The time limits for filing a motion to vacate are prescribed in subsec. (2) of sec. 806.07 which reads:

"(2) The motion shall be made within a reasonable time, and, if based on sub. (1)(a) or (c), not more than one year after the judgment was entered or the order or stipulation was made. A motion based on sub. (1)(b) shall be made within the time provided in s. 805.16. A motion under this section does not affect the finality of a judgment or suspend its operation. This section does not limit the power of a court to entertain an independent action to relieve a party from judgment, order or proceeding, or to set aside a judgment for fraud on the court."

Thus, the one year period constitutes the maximum time allowed or a "statute of limitations" period for bringing the motion to vacate on the grounds of mistake, surprise, inadvertence or excusable neglect. Callaghan's Wisconsin Pleading and Practices, sec. 40.15, p. 19. However, the mere fact that the motion is brought within one year after entry of judgment does not mean that the motion is timely. Callaghan's, Wisconsin Pleading and Practice, sec. 40.17, p. 20 recites the following in this regard:

" . . . Although the statute allows a year after entry of the judgment to make a motion in such a case, delay of even less than that time might still preclude the granting of relief, if there are circumstances 'of acquiescence, or of special injury to the plaintiff since the rule also requires that the motion be made within a reasonable time.' " See also : Graczyk, "The New Wisconsin Rules of Civil Procedure" Chapters 805-07, 59 Marq.L.Rev. 727 (1976).

The enactment of sec. 806.07 providing that a motion to vacate must be filed within a "reasonable time" is a significant amendment to its statutory predecessor, sec. 269.46, Stats. (1973), the former statute did not contain the "reasonable time" requirement and permitted the filing of the motion any time within one year after entry of the judgment. ¹ Because sec. 806.07 and the reasonable time element is a recent development (effective January 1, 1976, Supreme Court Order, 67 Wis.2d 726), this is the first Wisconsin case that will consider the question of what constitutes "reasonable time" under sec. 806.07(2), Stats.

It is important to note the procedural ramifications imposed by the new amendment setting forth a "reasonable time" requirement. The primary issue to be addressed by the court is whether the motion has been timely filed "within a reasonable time." On the other hand, if the motion is based upon subsections (1)(a) and (c) of sec. 806.07, ² the added requirement must also be complied with that the motion be filed within one year from entry of the judgment. If the court has concluded the motion was timely filed, then Wagner v. Springaire Corp., 50 Wis.2d 212, 220, 184 N.W.2d 88 (1971) sets forth the two essential elements to be considered in deciding a motion to vacate a judgment. First, do the moving papers demonstrate good cause...