Wisconsin Public Service Corp. v. Krist

• Decision Date: 03 November 1981
• Docket Number: No. 80-250,80-250
• Parties: WISCONSIN PUBLIC SERVICE CORPORATION, Plaintiff-Respondent, v. Fred KRIST, Defendant-Appellant-Petitioner.
• Court: Wisconsin Supreme Court

Page 624

311 N.W.2d 624

104 Wis.2d 381

WISCONSIN PUBLIC SERVICE CORPORATION, Plaintiff-Respondent, v. Fred KRIST, Defendant-Appellant-Petitioner.

No. 80-250.

Supreme Court of Wisconsin.

Argued Oct. 6, 1981.

Decided Nov. 3, 1981.

James J. Pauly, Milwaukee, argued, for defendant-appellant-petitioner; Borgelt, Powell, Peterson & Frauen, S. C., Milwaukee, on brief.

Eugene C. Daly, Milwaukee, argued, for plaintiff-respondent David A. Baker and Foley & Lardner, Milwaukee, on brief.

ABRAHAMSON, Justice.

This is a review of an unpublished decision of the court of appeals filed January 27, 1981, which affirms an order of the circuit court for Door county, Edwin C. Stephen, circuit judge. The circuit court denied Fred Krist's motion to vacate a default judgment which had been entered against him. We affirm the decision of the court of appeals.

The principal issue posed on review is whether a default judgment entered by the clerk of court is void if the circuit court has jurisdiction of the person and of the subject matter but the action is not on express contract for the recovery of a liquidated amount of money. ¹ We hold that the default judgment is not void. Accordingly we do not reach the second question posed on review, namely whether there is a limited time period during which a motion to vacate a void judgment must be made. We further hold that the circuit court did not abuse its discretion in holding that Krist's motion to vacate the judgment was not filed timely.

The facts which give rise to this issue are not in dispute. On November 16, 1976, Wisconsin Public Service Corporation (WPSC) commenced an action against Krist for the recovery of amounts due for electrical services during the years 1970-1975 for which the WPSC had not allegedly fully charged Krist. In July 1978, WPSC sought a voluntary dismissal of the action without prejudice pursuant to the parties' agreement that if WPSC recommenced the action, the action would start on or before November 17, 1978.

In October 1978, WPSC commenced the action which is the subject of this review. When Krist was served with the summons and complaint in this second action, he forwarded the documents to his attorney, a Mr. Gower, who had represented him in the prior action.

On November 17, 1978, after the time for answering had expired, WPSC forwarded to the clerk of court a default judgment which had been prepared for the clerk's signature and an affidavit stating that Krist had been duly served, that Krist had not filed an answer, and that Krist was in default.

On November 22, 1978, Attorney Gower filed a notice of appearance on behalf of Krist. On November 24, 1978, the clerk of courts entered a default judgment against Krist in the amount of $39,769.43 together with costs and prejudgment interest of.$6,284.87. On November 27, 1978, attorneys for WPSC forwarded to Attorney Gower a notice of entry of the default judgment, and on November 30, 1978, Attorney Gower called the attorneys for WPSC and requested that the default judgment be opened. WPSC agreed to open the judgment if Attorney Gower would draft the necessary stipulation. Attorney Gower neither sent the WPSC a stipulation nor filed an answer.

Sometime prior to January 17, 1979, WPSC began a garnishment action against Krist. Krist asserts that he first learned that the default judgment had been entered against him when his bank accounts were frozen. Krist agreed to pay WPSC $46,000 in installments if his bank accounts were released. Krist's accounts were released, and Krist paid a first installment of $16,000 on or about January 25, 1979, "under protest."

On or about October 26, 1979, some ten months after he learned of the entry of the default judgment, Krist filed a motion to reopen or vacate the default judgment pursuant to sec. 806.07, Stats. 1979-80. ² On November 12, 1979, the circuit court denied Krist's motion on the grounds that the motion had not been timely filed, and on February 12, 1980, the circuit court denied Krist's motion to reconsider the denial. Between the denial of the motion to reopen or vacate and the denial of the motion to reconsider, the circuit court and the parties discussed the possibility of reopening the judgment for the limited purpose of allowing proof of damages. However, no such limited reopening of the judgment took place.

The court of appeals affirmed the order of the circuit court, holding that the circuit court had not abused its discretion in refusing to reopen or vacate the default judgment.

On review Krist submits that the threshold question is not whether his motion to vacate was timely made but rather whether the default judgment is void. If the judgment is void, Krist contends that the circuit court is duty bound as a matter of law to vacate the void judgment regardless of the timeliness of the motion. ³ Krist argues that the judgment entered by the clerk of court is void because the circumstances under which a clerk is statutorily empowered to enter a default judgment are not present in the case at bar.

Sec. 806.02(4), Stats. 1979-80, sets forth the circumstances under which the clerk of court shall render and enter a default judgment without a court order. The statute provides that upon the plaintiff's filing specified documents the clerk of court shall render and enter a default judgment in an action on express contract for recovery of a liquidated amount of money only. Sec. 806.02(4), Stats. 1979-80, states as follows:

"In an action on express contract for recovery of a liquidated amount of money only, the plaintiff may file with the clerk the complaint, proof of personal service of the summons on one or more of the defendants and an affidavit that the defendant is in default for failure to join issue. The clerk shall render and enter judgment against the defendants who are in default for the amount demanded in the complaint. Leaving the summons at the abode of a defendant is not personal service within the meaning of this subsection."

In their briefs and at oral argument the parties dispute whether the action in the case at bar is on an express contract or for unjust enrichment and whether the action is for recovery of a liquidated amount of money only. This court cannot decide these questions without a more complete record than the one before the court, and this court need not decide these questions. Even if we were to determine that WPSC's action is not an action on express contract for recovery of a liquidated amount of money, we would conclude that the default judgment, although irregular, is not void and that in the case at bar the default judgment was not challenged in a timely fashion either by appeal or by a motion to vacate as provided in sec. 806.07, Stats. 1979-80.

This is not the first case presented to this court challenging a default judgment entered by a clerk when, for one reason or other, the conditions prescribed by statute under which the clerk may enter a judgment have not been satisfied. ⁴ The leading case is Frankfurth v. Anderson, 61 Wis. 107, 20 N.W. 662 (1884). The defendant in that case sought to set aside a default judgment entered by the clerk claiming that, contrary to statutes, ⁵ the complaint was not properly verified and failed to state a cause of action and the clerk failed to require the proving up of the claims. This court, holding the default judgment irregular but not void, affirmed the order of the trial court refusing to set aside the judgment.

Krist attempts to distinguish Frankfurth on the ground that the defects in that case were qualitatively different, that is, less serious than the defects in the case at bar. We are not persuaded that the statute setting forth the requirements for the entry of default judgment by the clerk admits of such a distinction. We conclude that the error asserted by Krist is substantially similar to the error found in Frankfurth to be an insufficient basis for declaring the judgment void. Although in Frankfurth the defendant did not assert that the action was not one on contract for the recovery of money only, the principles laid down in that case apply with equal force to the case at bar.

In concluding that a judgment entered erroneously by the clerk was not void, the court in Frankfurth reasoned as follows:

"The court had jurisdiction of the person of the defendant as well as of the subject matter. Whether the complaint set forth a cause of action, and whether the court had power to enter judgment upon the default of the defendant to answer upon the complaints imperfectly verified (admitting that they were not properly verified), were questions for judicial determination; and although they were in fact to be determined by the clerk, yet for all purposes of review they are to be deemed determined by the court. Wells v. Morton, 10 Wis. 473; Gorman v. Ball, 18 Wis. 24; Egan v. Sengpiel, 46 Wis. 703, 710, 1 N.W. 467. The judgments in the cases were not therefore void, although they may have been irregular. Jackson v. Astor, 1 Pin. 137; Wanzer v. Howland, 10 Wis. 8; Falkner v. Guild, id. (10 Wis.) 563; Tallman v. McCarty, 11 Wis. 401; Arnold v. Booth, 14 Wis. 180; Gale v. Best, 20 Wis. 44; Amory v. Amory, 26 Wis. 152; Pier v. Amory, 40 Wis. 571; Salter v. Hilgen, id. (40 Wis.) 363." Frankfurth v. Anderson, 61 Wis. 107, 108, 20 N.W. 662 (1884).

See also Schobacher v. Germantown Farmers' Mutual Ins. Co., 59 Wis. 86, 17 N.W. 969 (1883) (entry of default prior to expiration of answer time not void); Glassner v. Medical Realty, Inc., 22 Wis.2d 344, 126 N.W.2d 68 (1964) (judgment entered by clerk without giving statutory notice to defendant not void).

Frankfurth sets forth several important principles which govern this case. The Frankfurth court made clear that the actions of the clerk in entering a default judgment are the actions of the circuit court. The court reasoned that the clerk is an arm of the court and consequently even if the court is not actively...