Schmid v. Olsen

• Decision Date: 01 March 1983
• Docket Number: No. 81-1004,81-1004
• Citation: 111 Wis.2d 228,330 N.W.2d 547
• Parties: Arthur A. SCHMID, Plaintiff-Appellant-Petitioner, v. Charlotte M. OLSEN and American Family Mutual Insurance Company, a domestic corporation; and Associated Hospital Service, Inc., a domestic corporation, and United States of America, Defendants-Respondents.
• Court: Wisconsin Supreme Court

Page 547

330 N.W.2d 547

111 Wis.2d 228

Arthur A. SCHMID, Plaintiff-Appellant-Petitioner, v. Charlotte M. OLSEN and American Family Mutual Insurance Company, a domestic corporation; and Associated Hospital Service, Inc., a domestic corporation, and United States of America, Defendants-Respondents.

No. 81-1004.

Supreme Court of Wisconsin.

Argued Jan. 5, 1983.

Decided March 1, 1983.

Joseph G. Doherty (argued), West Bend, for plaintiff-petitioner; Bunk, Doherty & Griffin, S.C., West Bend, on brief.

Mary K. Wolverton (argued) Milwaukee, for defendants-respondents; Peterson, Johnson & Murray, Milwaukee, on brief.

CECI, Justice.

The issue presented is whether the trial court abused its discretion when it relieved a party from the effect of its failure to respond to a request for admission under § 804.11, Stats. ¹ The plaintiff's attorney had asked the defendants to admit that the defendant Olsen was seventy percent causally negligent. The trial court ruled that this request for admission was not an appropriate demand because it "ran to the complaint" and because the defendants had denied liability in their answer. The court of appeals held that the trial court did not abuse its discretion because, upon independent review of the record, it determined that allowing withdrawal of the admission served the presentation of the merits on a genuine issue in this case and that the plaintiff did not show that he would be prejudiced. ² We conclude that the trial court's decision was based upon an erroneous theory of law and, therefore, constitutes an abuse of discretion. Accordingly, we reverse and remand on this issue.

The plaintiff-appellant, Arthur Schmid, sustained bodily injuries when his motorcycle collided with an automobile being operated by Charlotte Olsen on March 23, 1976, in Washington county. Schmid commenced this action to recover for his injuries, including the amputation of his right leg below the knee. The complaint alleged that Charlotte Olsen's careless and negligent operation of her vehicle caused the collision. Schmid demanded damages of $750,000. Olsen and her insurer answered, denying any negligence or liability on her part.

After a pretrial conference, the circuit court issued a pretrial order on April 14, 1980, which stated that all discovery, except additional depositions of medical witnesses, was completed. The order estimated that the trial would take three and one-half to four days, and it set two alternate dates for the commencement of the trial, either August 5, 1980, or January 13, 1981. The court ordered the parties to submit proposed jury instructions, verdict forms, and trial briefs by July 25, 1980.

Schmid's attorney served the defense counsel with requests for admission under section 804.11, Stats. The first one, mailed to defense counsel on April 16, 1980, requested that Olsen and her insurer, American Family Mutual Insurance Company, admit the reasonableness and necessity of the plaintiff's medical expenses. The second request for admission was mailed on July 14, 1980, which was three weeks before the first scheduled trial date, but after the trial had been moved back to the second alternate date. By this request, Schmid asked Olsen and American Family to admit that Olsen was seventy percent causally negligent and that Olsen told her insurer she did not see the plaintiff's motorcycle before the collision.

The defendants did not respond to any of these requests during the thirty-day statutory period under section 804.11(1)(b), Stats. They also failed to bring a formal motion to withdraw or amend the admissions after the thirty-day period had elapsed. Both the plaintiff's and the defendants' proposed jury instructions and special verdict forms dealt with the issue of comparative negligence. However, when the special verdict forms and jury instructions were submitted, in July, 1980, the thirty-day statutory period for response to the second request for admission had not yet expired.

On January 5, 1981, eight days before the second scheduled trial date, the defense attorney wrote a letter to the trial court, asking the trial court to consider the letter as a formal denial of the requests for admission. Schmid's attorney responded with a letter to the court, dated January 9, 1981, stating that Schmid was relying on the admissions resulting from the defendants' failure to respond.

The trial began on January 13, 1981. In his opening statement, the plaintiff's attorney told the jury that liability was not an issue to be tried in the case before them. The defendants' counsel objected. After the jury was excused, the trial court heard arguments regarding the effect of the defendants' failure to respond to the admissions. The court accepted the medical expenses as stipulated evidence and held that Olsen's statement to her insurer was conclusively established because the defense attorney failed to respond to the requests for admission. On the request to admit seventy percent causal negligence, the trial court noted that such a request need not be limited to fact or facts, but may seek, when appropriate, opinions of facts or of the application of law to facts. However, the court ruled that the request concerned a question of law and that in this situation, such a request was not "appropriate" because it ran to the complaint and because the defendants had denied liability in their answer.

The case proceeded to trial, and the plaintiff produced several witnesses in his behalf, including two eyewitnesses and the investigating police officer. The jury found the defendant Olsen only twenty-five percent causally negligent and assessed seventy-five percent of the causal negligence against the plaintiff. The plaintiff moved for judgment notwithstanding the verdict on the grounds that the trial court committed error because it refused to give effect to the admission that the defendant Olsen was seventy percent causally negligent. The court denied Schmid's motion and ordered that judgment be entered dismissing the plaintiff's complaint with costs.

The judgment was affirmed by the court of appeals. The court disagreed with the trial court's ruling that the defendant could not be held to the admission because the request for admission related to issues raised in the pleadings. However, the court concluded that there were significant independent grounds to support the trial court's decision to allow withdrawal of the admission.

The court of appeals noted that a trial court's decision to allow withdrawal of an admission constitutes an exercise of discretion and that such an exercise of discretion should be based on the trial court's consideration of the criteria set forth in section 804.11(2), Stats., which provides that a court may permit withdrawal or amendment of an admission

"when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice the party in maintaining the action or defense on the merits..."

The court of appeals concluded that the trial court's decision on this question constituted an abuse of discretion as a matter of law, since the decision failed to demonstrate, on its face, consideration of the proper factors. However, the court added, citing Conrad v. Conrad, 92 Wis.2d 407, 415, 284 N.W.2d 674 (1979), that it was required to

"uphold a discretionary decision of the trial court if, from the record, it can be concluded ab initio that there are facts of record which would support the trial judge's decision had discretion been exercised on the basis of those facts." 107 Wis.2d at 295, 320 N.W.2d 18.

The court of appeals then discussed whether the requirements of section 804.11(2), Stats., for amendment or withdrawal of an admission had been met in the instant case. On the first question, whether the presentation of the merits would be subserved by permitting withdrawal of the admission, the court determined that the test had been met. It stated that liability was denied by the defendants in their answer and remained an issue throughout the litigation and that the trial court was in a superior position to determine whether liability was a genuine issue. 107 Wis.2d at 297, 320 N.W.2d 18.

The court also decided that the plaintiff's claim of prejudice resulting from the withdrawal of the admission had no basis, stating that the plaintiff's attorney had never asked for an adjournment in order to further prepare his case and that he was able to subpoena his witnesses on the first day of trial, and all three witnesses testified. Id. at 297-98, 320 N.W.2d 18. The court of appeals concluded that the trial court properly exercised its discretion in allowing the defendants to withdraw the admission and fully litigate the issue of liability. Id. at 298, 320 N.W.2d 18.

The court of appeals also rejected the plaintiff's argument that the trial court's ruling was improper because the defense had not brought a formal motion for withdrawal under section 804.11(2), Stats., holding that it was not necessary for a party seeking to amend or withdraw an admission to make a formal motion in every case. The court decided that because of the January 5, 1981, letter, the fact that the defendants had denied liability in their answer and because liability was at issue throughout the litigation, it should have been obvious to the plaintiff's attorney that the defendants denied the substance of the admissions. ³

In order to determine whether the trial court's ruling concerning the effect of the admissions should be allowed to stand, the reasons given for the decision must be considered. The trial judge relieved the defendants from the effect of the admissions, reasoning that the request to admit seventy percent negligence was not an appropriate demand because it ran to the complaint and because the defendants denied liability in their answer. This is not the law in...