Wagner v. Springaire Corp.

• Decision Date: 02 March 1971
• Docket Number: Nos. 56,57,s. 56
• Parties: Ray WAGNER, Respondent, v. SPRINGAIRE CORPORATION, a Wis. corp., Appellant. Erwin PLESHEK, Respondent, v. SPRINGAIRE CORPORATION, a Wis. corp., Appellant.
• Court: Wisconsin Supreme Court

Page 88

184 N.W.2d 88

50 Wis.2d 212

Ray WAGNER, Respondent, v. SPRINGAIRE CORPORATION, a Wis. corp., Appellant.

Erwin PLESHEK, Respondent, v. SPRINGAIRE CORPORATION, a Wis. corp., Appellant.

Nos. 56, 57.

Supreme Court of Wisconsin.

March 2, 1971.

These are appeals from two judgments of default against the defendant, Springaire Corporation, and from two orders denying motions for the vacation of those judgments.

Number 56 was an action commenced by Ray Wagner against Springaire Corporation. Erwin F. Pleshek, vice president of the defendant corporation, admitted service of the summons on May 21, 1969. The corporation retained Dempsey, Dempsey, Magnusen & Williamson of Oshkosh to represent it, but on August 5, 1969, a consent to substitution of attorneys was filed, and Horwitz & Regner of Oshkosh were designated as the corporation's attorneys of record. Defendant's attorneys admitted service of Wagner's complaint on August 12, 1969.

The complaint alleged that Springaire was indebted to Wagner in the sum of $2,500 and that payment had not been made.

Number 57 was an identical action commenced in the same court by Erwin Pleshek against Springaire Corporation. Service of the summons was admitted by Ray Wagner as secretary of the corporation on May 21, 1969. The corporation also retained Dempsey, Dempsey, Magnusen & Williamson to represent it in this action, but on August 5, 1969, Horwitz & Regner were substituted as attorneys for the corporation. Service of Pleshek's complaint was admitted on August 12, 1969.

This complaint alleged that Springaire was indebted to Pleshek in the sum of $3,700 remaining due on a note in the amount of $10,500.

No answer to either the Wagner complaint or the Pleshek complaint was ever served by Springaire. The twenty-day limit for answering (sec. 263.05, Stats.) expired on September 1, 1969. On October 20, 1969, plaintiffs in both actions served Springaire's attorneys with notice of application for default judgments. Both applications were heard in the Winnebago county court on November 3, 1969. Attorney Simon Horwitz, arguing on behalf of Springaire, admitted that his client was in default, but contended that the default was entirely the responsibility of Horwitz and should not be imputed to the defendant corporation. He requested that his client be granted an enlargement of time to serve an answer under sec. 269.45(2), Stats. The trial court denied the request and then took testimony to determine whether the claims stated in the respective complaints were bona fide. In its findings of fact and conclusions of law, the trial court determined that all allegations of Wagner's complaint were true and that $1,500 was then due and owing on the note from Springaire, instead of the $2,500 alleged. The trial court determined that the allegations of Pleshek's complaint were true and that $3,700 was owing on his note from Springaire. Judgments were entered in favor of Wagner and Pleshek for those amounts plus the costs and disbursements.

On November 20, 1969, attorneys for Springaire procured orders requiring each plaintiff to show cause why the judgment entered in his favor against Springaire should not be vacated pursuant to sec. 269.46(1), Stats. Attached to each order was an affidavit of Alladin Eid, president of Springaire, which purported to show the merit of Springaire's defense. There is no transcript of what transpired at the hearing on the orders to show cause, but on January 20, 1970, the trial court entered an order concluding that the neglect of the defendant corporation in failing to answer the complaints of the plaintiffs was not excusable and that Springaire had failed to submit sufficient evidence to permit the trial court to find that Springaire had defenses to the causes of action alleged in the complaints.

The defendant corporation appeals from both judgments against it and from both orders denying its motions to vacate the judgments. The cases were consolidated for appeal by stipulation of the parties.

Hersh, Magidson & Lensky, Milwaukee, Horwitz & Regner, Oshkosh, for appellant.

Van Epps, Gull & Werth, Weyauwega, for respondents.

HEFFERNAN, Justice.

The hearing on applications for default judgments was held on November 3, 1969, more than sixty days after the expiration of the time for answering the complaints. The hearing was upon due notice. At the hearing the defendant asked for enlargement of the time in which to answer.

Sec. 269.45(2), Stats., provides:

'After the expiration of the specified period * * *, the court may in its discretion, for like cause, upon notice, extend the time where the failure to act was the result of excusable neglect * * *.'

To show excusable neglect, Springaire's attorney submitted identical affidavits in each case. The affidavits state that he, the attorney, had failed to timely file Springaire's answer because of the 'pressure of work and personal affairs, including distress by reason of prolonged illness of his wife during the past three months.' The attorney further stated that the neglect was his and was not attributable to the president of Springaire.

The motion for enlargement of time to answer were denied, and after further hearing default judgments were entered.

The power conferred by sec. 269.45(2), Stats., is highly discretionary, and a trial court's determination in this respect will not be disturbed except for a clear abuse of discretion. Town of Greenfield v. City of Milwaukee (1951), 259 Wis. 101, 47 N.W.2d 291; Bornemann v. City of New Berlin (1965), 27 Wis.2d 102, 133 N.W.2d 328. The burden is upon the party seeking to extend the time to show proper notice, cause, and excusable neglect. Miller v. Belanger (1957), 275 Wis. 187, 81 N.W.2d 545.

There is no doubt that defendant's attorney showed there was 'cause' for the delay. There was not a mere disregard of his duty as an attorney to prepare and serve the answers of the defendant. There was a reason asserted for neglecting to act in a timely manner.

The question remains, was the neglect 'excusable'?

In Giese v. Giese (1969), 43 Wis.2d 456, 168 N.W.2d 832, a case involving the failure to timely serve a complaint, we reasserted that a trial judge's determination to enlarge the time for acting was highly discretionary and would only be upset in the event there is a clear abuse of discretion.

In Giese, page 461, 168 N.W.2d page 834, we cited with approval the definition of 'excusable neglect' appearing in 15A Words and Phrases (perm. ed.) 225: "Excusable neglect' is that neglect which might have been the act of a reasonably prudent person under the same circumstances.'

In Giese, where, as here, the pressure of other work was asserted by the attorney, we concluded that 'excusable neglect' was not shown without additional persuasive explanation. As in Giese, no persuasive further explanation is given in this case. In fact, no explanation is given beyond the above assertion. We conclude that there was no abuse of discretion when the trial judge determined that the 'pressure of work' did not constitute a sufficient excuse for the neglect to file an answer.

Additionally, defendant's attorney states that distress occasioned by a prolonged illness of his wife caused him to neglect to file the answers. Again, however, he has given no explanation of how much of his time was diverted from his law practice by reason of this family illness. Nor was any explanation given why he was unable to have another member of his law firm draft timely answers. In the absence of persuasive explanation by the defendant, the trial judge's determination that these factors do not suffice to constitute 'excusable neglect' must be sustained.

We also note that defendant contends that the plaintiffs had acquiesced in at least a portion of the delay. Our review of the record leads only to the conclusion that the plaintiffs, after the service of the summonses, deferred the service and filing of the complaints to permit Springaire's attorney to catch up on other work. The summonses were served on May 21, 1969, but the complaints were not served until August 12, 1969. While there is evidence of some agreement to delay the service of the complaints, there is no evidence that plaintiffs agreed to a delay for answering after the complaints were served. While neglect in filing an answer as the result of an agreement between counsel is clearly 'excusable neglect,' no such agreement is shown here. Giese, supra, 43 Wis.2d p. 462, 168 N.W.2d 832.

Shortly after default judgments were entered, defendant moved to vacate the judgments, pursuant to sec. 269.46(1), Stats., which provides as follows:

'269.46 Relief from judgments, orders and stipulations; review of judgments and orders (1) The court may, upon notice and just terms, at any time within one year after notice thereof, relieve a party from a judgment, order, stipulation or other proceeding...