Case Title: Carole F. Edland v. Wisconsin Physicians Service Insurance Corporation

Citation: 

Docket Number: 1996AP001883

State: wisconsin

Court: Wisconsin Supreme Court

Date: 1997-06-12T00:00:00Z

Document:
SUPREME COURT OF WISCONSIN 
 
 
Case No.: 
96-1883 
 
 
Complete Title 
of Case: 
 
Carole F. Edland, Dr. Robert W. Edland and 
Economy Preferred Insurance Company, 
 
Plaintiffs-Appellants, 
 
v. 
Wisconsin Physicians Service Insurance 
Corporation, 
 
Defendant-Respondent. 
 
 
ON CERTIFICATION FROM THE COURT OF APPEALS 
 
 
Opinion Filed: 
June 12, 1997 
Submitted on Briefs: 
April 10, 1997 
Oral Argument: 
 
 
 
Source of APPEAL 
 
COURT: 
Circuit 
 
COUNTY: 
La Crosse 
 
JUDGE: 
John J. Perlich 
 
 
JUSTICES: 
 
Concurred: 
 
 
Dissented: 
 
 
Not Participating:  
 
 
ATTORNEYS: 
For the plaintiffs-appellants there was a brief 
(in the Supreme Court) by Robert D. Johns, Jr. And Johns & 
Flaherty, S.C., La Crosse. 
 
 
For the defendant-respondent there was a 
memorandum (in the Court of Appeals) by Terry J. Booth and 
Fellows, Piper & Schmidt, Milwaukee. 
 
No. 96-1883 
 
1 
 
NOTICE 
This opinion is subject to further editing 
and modification.  The final version will 
appear in the bound volume of the official 
reports. 
 
 
No. 96-1883 
 
STATE OF WISCONSIN               :        
        
 
 
 
 
IN SUPREME COURT 
 
 
Carole F. Edland, Dr. Robert W. Edland and 
Economy Preferred Insurance Company, 
 
  
Plaintiffs-Appellants, 
 
 
v. 
 
Wisconsin Physicians Service Insurance 
Corporation, 
 
 
Defendant-Respondent. 
 
FILED 
 
JUN 12, 1997 
 
Marilyn L. Graves 
Clerk of Supreme Court 
Madison, WI 
 
 
 
 
 
 
APPEAL from an order of the Circuit Court for La Crosse 
County, John J. Perlich, Circuit Court Judge.  Affirmed and 
cause remanded. 
¶1 
ANN WALSH BRADLEY, J.   The court of appeals, by 
certification, asks us to determine whether the circuit court 
may extend the statutory time to appeal by vacating and 
reentering an order which it intended but failed to mail to the 
parties.  Although the parties stipulate that the circuit court 
may vacate and reenter its order in this case, the court of 
appeals has raised the issue on its own.  We conclude that when 
the record demonstrates the circuit court's intention to send 
notice of an order to the parties, and the court subsequently 
acknowledges its mistake in failing to send such notice, it may 
effectively 
extend 
the 
time 
to 
appeal 
by 
vacating 
and 
No. 96-1883 
 
2 
reinstating its unnoticed order.  Accordingly, without reaching 
the substantive issues raised in this case, we affirm the order 
of the circuit court which vacated and reinstated the October 9, 
1995 order. 
¶2 
The relevant facts are procedural in nature, and are 
not in dispute.  The plaintiffs, Carole F. Edland, Robert W. 
Edland, and Economy Preferred Insurance Company (EPIC), filed a 
declaratory judgment action seeking a determination of the 
subrogation rights of 
the 
defendant, 
Wisconsin 
Physicians 
Service Insurance Corporation, to the Edlands' underinsured 
motorist coverage provided by EPIC. 
¶3 
On October 9, 1995, the La Crosse County Circuit 
Court, John J. Perlich, Judge, entered a "Memorandum Decision 
and Order" addressing the substantive issues in this case.
1  At 
the end of the order appeared the following: 
 
cc: Attorney Robert D. Johns, Jr. 
 
Attorney Terry J. Booth 
Despite its contrary intention, the circuit court did not mail 
the order to the above-named attorneys.
2  Only after the 90-day 
statutory time limit for appeal passed did the parties and their 
attorneys become aware of the earlier entry of the order.
3 
                     
1 We assume without deciding that the October 9, 1995 order 
was 
final 
for 
purposes 
of 
appeal. 
 
See 
Wis. 
Stat. 
§ 808.03(1)(1995-96).  Unless otherwise indicated, all future 
statutory references are to the 1995-96 volume.   
2 Attorney Johns represents the Edlands and EPIC.  Attorney 
Booth 
represents 
Wisconsin 
Physicians 
Service 
Insurance 
Corporation.  
3 See Wis. Stat. § 808.04(1), which provides: 
An appeal to the court of appeals must be initiated 
within 45 days of entry of judgment or order appealed 
from if written notice of the entry of judgment or 
No. 96-1883 
 
3 
¶4 
Within two months of learning of the entered order, 
the plaintiffs filed a motion requesting that the circuit court 
vacate and reinstate the October 9, 1995 order pursuant to Wis. 
Stat. § 806.07(1)(a).
4  The defendant did not oppose the motion. 
 The court granted the motion to vacate and reenter the order, 
stating that it had mistakenly failed to send the decision and 
order to the parties, that both parties agreed on the relief to 
be granted, and that the relief was appropriate because the 
mistake was committed by the court rather than the parties.  A 
written order was entered the following day, and judgment was 
entered on June 26, 1996.  The plaintiffs then appealed the 
circuit court's order addressing the substantive issues in this 
case.  
¶5 
In a sua sponte review of its jurisdiction, the court 
of appeals directed the parties to submit memoranda addressing 
whether the plaintiffs' failure to file a timely appeal from the 
circuit court's October 9, 1995 order deprived the court of 
appeals of jurisdiction over the appeal.  After the parties 
                                                                  
order is given within 21 days of the judgment or order 
as provided in s. 806.06(5), or within 90 days of 
entry if notice is not given, except as provided in 
this section or otherwise expressly provided by law. 
   
4 Wis. Stat. § 806.07(1)(a) provides in part: 
Relief from judgment or order. (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: 
(a) 
Mistake, 
inadvertence, 
surprise, 
or 
excusable neglect . . . or 
(h)  Any other reasons justifying relief 
from the operation of the judgment.  
No. 96-1883 
 
4 
submitted memoranda on the issue, the court of appeals certified 
the case to this court. 
¶6 
This court takes a slightly different view of the 
issue on appeal from that certified by the court of appeals.
5  We 
see the question as follows: If the record demonstrates that the 
circuit court intended to send notice of an order to the 
parties, and the court subsequently acknowledges its failure to 
carry out its earlier expressed intention, may the court 
effectively 
extend 
the 
time 
to 
appeal 
by 
vacating 
and 
reinstating its unnoticed order under § 806.07(1)(a)? 
¶7 
Rulings on motions under § 806.07 are reviewed under 
an erroneous exercise of discretion standard.  State ex rel. 
M.L.B. v. D.G.H., 122 Wis. 2d 536, 541, 363 N.W.2d 419 (1985).  
A court erroneously exercises its discretion when its decision 
                     
5 The court of appeals certified the following issues: 
1.  Is the circuit court required by § 801.14(1), 
Stats. to serve its decision on the parties?  If so, 
does the court's failure to do so have any effect on 
the operation of the statutes governing the time to 
appeal, or provide a basis for vacating the judgment 
on the ground of mistake under § 806.07(1)(a), Stats? 
 
2.  May a circuit court effectively extend the time to 
appeal by vacating and reentering a judgment using 
§ 806.07(1)(h), Stats., which allows relief from the 
judgment for "any other reason"?  If so, under what 
circumstances, and should the court's decision in this 
case be affirmed on that ground? 
 
3.  Is the appellant deprived of property without due 
process of law when the time to appeal commences with 
entry of a decision which the appellant does not 
receive? 
 
The court of appeals also noted that depending upon the answers, 
a decision on all three certified questions may not be 
necessary. 
No. 96-1883 
 
5 
is based upon an error of law.  Id. at 542.  Applying that 
standard to this case, we will uphold the circuit court's grant 
of the plaintiffs' motion under § 806.07(1)(a) if the statute 
authorizes relief from an order for the reasons provided by the 
circuit court.  This court interprets a statute under a de novo 
standard, without deference to the decision of the court of 
appeals or circuit court.  Stockbridge School Dist. v. DPI, 202 
Wis. 2d 214, 219, 550 N.W.2d 96 (1996). 
¶8 
Section § 806.07 attempts to achieve a balance between 
fairness in the resolution of disputes and the policy favoring 
the finality of judgments.  State ex rel. M.L.B, 122 Wis. 2d at 
542 (citing Graczyk, The New Wisconsin Rules of Civil Procedure, 
Chapters 805-807, 59 Marq. L. Rev. 671, 727 (1976)).  The 
statute enhances fairness in the administration of justice by 
authorizing a circuit court to vacate judgments on various 
equitable grounds.  Section 806.07(1)(a) furthers the policy 
favoring finality by limiting the time period for motions under 
that section to the shorter of one year or a reasonable amount 
of time after a judgment or order is entered.  See § 806.07(2); 
Rhodes v. Terry, 91 Wis. 2d 165, 171, 280 N.W.2d 248 (1979). 
¶9 
By including at the end of the October 9, 1995 order a 
carbon copy signal naming the parties' attorneys, the circuit 
court evinced in the record an intent to send notice of the 
order to the parties.  There is no dispute that the court 
mistakenly failed to carry out its intent to provide such 
notice.  The order vacating and reinstating the original order 
provides: 
 
A copy of the order was to be sent to both counsel.  
Through an oversight, it was not.  Accordingly, the 
No. 96-1883 
 
6 
parties have asked that this Court vacate that order 
and reinstitute the order as of this date, so that 
various appellate issues can be eliminated.  Such an 
order is appropriate since the mistake was the 
Court's, not the parties, and since both parties have 
stipulated. 
¶10 In light of the circuit court's intention, reflected 
in the record, to send notice of its decision and order to the 
parties, and its subsequently acknowledged mistake in failing to 
send the notice, we conclude that such failure constitutes a 
"mistake" for purposes of § 806.07(1)(a).
6  As noted in the 
request for certification, however, there are prior decisions of 
the court of appeals which arguably preclude the circuit court 
from effectively extending the time to appeal by vacating and 
reinstating an order under § 806.07(1)(a). 
¶11 In Eau Claire County v. Employers Ins., 146 Wis. 2d 
101, 430 N.W.2d 579 (Ct. App. 1988), the circuit court entered 
separate judgments dismissing the plaintiff's claims against its 
insurers.  The first judgment was entered on June 25, 1987, and 
dismissed the plaintiff's claims against Insurer A.  Id. at 106. 
 Insurer A notified the plaintiff of the judgment, and the 
plaintiff was thereby required to file a notice of appeal within 
45 days of entry of judgment.  See § 808.04(1).  The second 
judgment was entered on July 20, and dismissed the plaintiff's 
claim against Insurer B.  Insurer B also notified the plaintiff 
of the entry of judgment.  Laboring under the erroneous belief 
that the two judgments had to be combined in a single appeal, 
the plaintiff waited until August 14 to file a notice of appeal 
from both the June 25 and July 20 judgments.   
                     
6 We do not reach the issue of whether the circuit court was 
required to provide the parties with copies of its memorandum 
decision and order. 
No. 96-1883 
 
7 
¶12 Insurer A filed a motion to dismiss the appeal based 
upon the plaintiff's failure to file within 45 days of the June 
25 judgment.  The plaintiff then filed in the circuit court a 
motion to vacate the earlier judgments, which the court granted 
under § 806.07(1)(h).  Eau Claire County, 146 Wis. 2d at 108.  
The circuit court later entered a consolidated judgment similar 
in substance to the earlier judgments.  Insurer A appealed. 
¶13 The court of appeals held that the circuit court 
erroneously exercised its discretion in granting the plaintiff's 
motion to vacate.  The court reasoned: 
 
Under the circumstances, therefore, we conclude that 
sec. 806.07(1)(h) does not authorize the trial court 
to essentially expand the time for appeal when the 
time for such appeal ha[s] passed.  We do not decide 
whether sec. 806.07(1)(h) may be used under some other 
set of facts to consolidate separate judgments outside 
the specified time limits.  However, insufficient 
cause is offered in the present case to justify an 
exception to the strong policy behind the finality of 
judgments.  The inaction and assumptions relied upon 
are 
far 
from 
the 
"extraordinary 
circumstances" 
recognized as a basis for reopening a final judgment 
under sec. 806.07(1)(h), and do not justify the court 
stepping in to mitigate the situation. 
Id. at 111. 
¶14 The Eau Claire County court did not create a blanket 
proscription against extending the time to appeal by vacating 
and reinstating a judgment.  Indeed, such a proscription would 
be inconsistent with the normal operation of the statute, since 
vacating an order and entering another will invariably start 
anew the time period for appeal. 
¶15 The instant case presents facts different from those 
in Eau Claire County.  In Eau Claire County, the plaintiff 
received notice of the judgment well before the expiration of 
the appeal period.  Here, none of the parties had notice of the 
No. 96-1883 
 
8 
order until after the appeal period expired.  In Eau Claire 
County, the plaintiff's misunderstanding of procedure resulted 
in a failure to file a timely notice of appeal.  Here, the 
record demonstrates, and the circuit court has acknowledged, 
that the plaintiffs' failure to file a timely notice of appeal 
was the result of the court's error alone.  We conclude that 
these factual distinctions render Eau Claire County inapplicable 
to the present case. 
¶16 The facts in ACLU v. Thompson, 155 Wis. 2d 442, 455 
N.W.2d 268 (Ct. App. 1990), are closer to those of the instant 
case.  In ACLU, the plaintiffs received no notice that a final 
judgment had been entered against them, and so failed to file a 
notice of appeal within the time prescribed by § 808.04(1).  The 
court of appeals affirmed the circuit court's denial of the 
plaintiffs' motion to vacate and reinstate the judgment under 
§§ 806.07(1)(a) & (h).  Citing Eau Claire County, the court of 
appeals reasoned that "a trial court cannot vacate and reenter a 
judgment solely for the purpose of permitting an appeal."  ACLU, 
155 Wis. 2d at 445 n. 5.  Moreover, the reason "[w]hy plaintiffs 
received no notice of the judgment is irrelevant . . . ."  Id.   
¶17 The ACLU court correctly held that a circuit court has 
no authority to vacate and reenter an order or judgment when its 
sole basis for doing so is the unadorned desire to allow an 
appeal.  Considerations of finality militate strongly against 
resuscitating a case after the time for appeal has expired.  The 
orderly administration of justice is enhanced by a definite 
starting and ending point for litigation.  The time limitations 
on appeal provide such conclusiveness.  Moreover, prevailing 
No. 96-1883 
 
9 
parties reasonably relying on the finality of an order or 
judgment may often be prejudiced by the reopening of a case 
after the time for appeal has expired.   
¶18 However, there is no blanket proscription against 
vacating and reentering an order or judgment.  We conclude that 
under the circumstances of this case, the circuit court's 
mistake constitutes a compelling equitable consideration under 
§ 806.07(1)(a) which outweighs the goal of finality and provides 
a basis for effectively extending the time to appeal.  We 
therefore overrule that portion of ACLU which stands for the 
proposition that regardless of the reason, a court can never 
effectively extend the time period for appeal by vacating and 
reentering an order or judgment. 
¶19 Our holding in this case is a narrow one.  Here, the 
mistake was one committed by the circuit court alone, and that 
court has acknowledged committing the mistake.  The circuit 
court's mistake is evidenced by more than an after-the-fact 
acknowledgment by the court; the carbon copy signal at the end 
of the order demonstrates in the record that when the order was 
written, the court intended to mail notice to the parties.  For 
these reasons, we conclude that the circuit court did not 
erroneously exercise its discretion by granting the plaintiffs' 
§ 806.07(1)(a) motion.  We therefore affirm the circuit court's 
order which vacated and reinstated the October 9, 1995 order.  
We do not reach the substantive issues raised in this case.  
Rather, we remand 
to 
the 
court 
of 
appeals 
for further 
proceedings. 
No. 96-1883 
 
10
By the Court.—The order of the circuit court is affirmed 
and the cause is remanded.