Case Title: Ramachandra Rao, M.D. v. WMA Securities, Inc.

Citation: 2008 WI 73

Docket Number: 2006AP000813

State: wisconsin

Court: Wisconsin Supreme Court

Date: 2008-06-27T00:00:00Z

Document:
2008 WI 73 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2006AP813 
COMPLETE TITLE: 
 
 
Ramachandra Rao, M.D., 
          Plaintiff-Respondent-Cross-Appellant, 
     v. 
WMA Securities, Inc., 
          Defendant-Appellant-Cross-Respondent-
Petitioner, 
 
World Group Securities, Inc., IDEX Investor 
Services, Inc., State Street Bank & Trust 
Company and David Novak, 
          Defendants. 
 
 
 
 
REVIEW OF A COURT OF APPEALS DECISION 
Reported at: 301 Wis. 2d 748, 731 N.W.2d 383 
(Ct. App. 2007-Unpublished) 
 
 
OPINION FILED: 
June 27, 2008   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
March 4, 2008   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Rock   
 
JUDGE: 
James Welker   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
ZIEGLER, J., concurs (opinion filed).   
 
DISSENTED: 
PROSSER, J., dissents (opinion filed). 
ROGGENSACK, J., joins dissent.   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For 
the 
defendant-appellant-cross-respondent-petitioner 
there were briefs by Sean Lanphier and Mallery & Zimmerman, 
S.C., Milwaukee, and oral argument by Sean Lanphier. 
 
For the plaintiff-respondent-cross-appellant there was a 
brief by Sara L. Gehrig and Nowlan & Mouat LLP, Janesville, and 
oral argument by Sara L. Gehrig. 
 
 
 
 
2008 WI 73
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
 
No.  2006AP813   
(L.C. No. 
2003CV1661) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Ramachandra Rao, M.D.,   
 
 
Plaintiff-Respondent-Cross-Appellant,  
 
 
v. 
 
WMA Securities, Inc.,   
 
 
Defendant-Appellant-Cross-Respondent-          
          Petitioner, 
 
World Group Securities, Inc., 
IDEX Investor Services, Inc., 
State Street Bank & Trust Company and David 
Novak,   
 
 
Defendants. 
FILED 
 
JUN 27, 2008 
 
David R. Schanker 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Affirmed.   
 
¶1 
SHIRLEY 
S. 
ABRAHAMSON, 
C.J.   The 
defendant, 
WMA 
Securities, Inc., seeks review of an unpublished court of 
appeals decision affirming in part and reversing in part a 
judgment and an order of the Circuit Court for Rock County, 
James Welker, Judge.1  After the defendant continuously failed to 
                                                 
1 Rao v. WMA Securities, Inc., No. 2006AP813, unpublished 
slip op. (Wis. Ct. App. Mar. 29, 2007). 
No. 
2006AP813   
 
2 
 
comply with the circuit court's discovery orders, the circuit 
court issued an order striking the defendant's pleadings and 
awarding judgment by default to the plaintiff, Ramachandra Rao, 
M.D., against the defendant.   
¶2 
The circuit court ordered a hearing on damages, 
denying the defendant's request for a jury trial on this issue.  
The court of appeals affirmed the circuit court's ruling denying 
a jury trial.2   
¶3 
The circuit court denied the plaintiff's request for 
punitive damages under Wis. Stat. § 895.043 (2005-06).3  The 
court of appeals reversed the circuit court's denial of punitive 
damages, remanding the issue to the circuit court to exercise 
its discretion in determining the nature of the hearing on 
punitive damages and to determine whether punitive damages are 
warranted.4    
                                                 
2 The court of appeals stated: "Because [the defendant] has 
not cited supporting authority for its proposition that a party 
is entitled to a jury trial following a default judgment, we 
decline to consider its argument further."  Rao v. WMA 
Securities, Inc., No. 2006AP813, unpublished slip op., ¶23 (Wis. 
Ct. App. Mar. 29, 2007).   
3 All subsequent references to the Wisconsin Statutes are to 
the 2005-06 version unless otherwise indicated. 
At the time this action was brought the punitive damages 
statute was numbered Wis. Stat. § 895.85 (2003-04).    
4 Rao v. WMA Securities, Inc., No. 2006AP813, unpublished 
slip op., ¶42 (Wis. Ct. App. Mar. 29, 2007).  The court of 
appeals further explained its remand at ¶42 as follows: 
For example, the court may hold an evidentiary 
hearing, consider Rao's offer of proof to determine if 
an evidentiary hearing is warranted, or allow Rao an 
No. 
2006AP813   
 
3 
 
¶4 
Two issues are presented on review of the decision of 
the court of appeals:5 
I. 
Did the circuit court violate the defendant's right of 
trial by jury under Article I, Section 5 of the Wisconsin 
Constitution when it denied the defendant's motion for a 
jury trial on the issue of damages after it ordered a 
judgment by default against the defendant? 
II. 
Did the circuit court err in denying the plaintiff's 
punitive damages claim?    
¶5 
We conclude that the circuit court did not violate the 
defendant's right of trial by jury under Article I, Section 5 of 
the Wisconsin Constitution when it denied the defendant's motion 
for a jury trial on the issue of damages.  The defendant waived 
                                                                                                                                                             
opportunity to submit additional proof to support his 
case for punitive damages before determining whether 
to hold a full evidentiary hearing. 
5 The court of appeals was presented with both an appeal by 
the defendant and a cross-appeal by the plaintiff and decided a 
number of issues that neither party has briefed or has sought to 
have reviewed here.  Accordingly, the court does not address 
these issues and limits its review to the two issues the parties 
present.  
The court of appeals affirmed the circuit court's order 
striking the defendant's pleading and awarding default judgment 
to the plaintiff; the circuit court's determination of the 
amount of the plaintiff's damages; and the circuit court's 
ruling denying the plaintiff's request for multiple damages 
under Wis. Stat. § 895.80.  The court of appeals reversed the 
circuit court's ruling denying the defendant's request to 
present evidence of the plaintiff's failure to mitigate damages 
and reversed the circuit court's ruling not to offset the 
damages award by the amount the plaintiff recovered from 
settling defendants.  
No. 
2006AP813   
 
4 
 
its right of trial by jury in the manner set forth in Wis. Stat. 
§§ (Rule) 804.12(2) and 806.02.  We further conclude that the 
circuit court erred in denying the plaintiff's claim for 
punitive damages solely on the basis of allegations in the 
complaint and in denying the plaintiff an opportunity to prove 
additional facts in support of the punitive damages claim.   
¶6 
Accordingly, we affirm the decision of the court of 
appeals.  We affirm, as did the court of appeals, the circuit 
court's denial of the defendant's request for a jury trial on 
the issue of damages.  We reverse, as did the court of appeals, 
the circuit court's ruling denying punitive damages, and remand 
the issue of punitive damages to the circuit court to exercise 
its discretion in determining the nature of the hearing on 
punitive damages and to determine whether punitive damages are 
warranted.  We affirm the decision of the court of appeals 
remanding the cause to the circuit court. 
¶7 
We briefly summarize the facts giving rise to the 
instant case and present additional facts relating to each issue 
when we address that issue.  The facts are more fully stated in 
the decision of the court of appeals.  
¶8 
The plaintiff brought an action against the defendant, 
an employee of the defendant, and three additional co-defendants 
alleging that the employee unlawfully converted hundreds of 
thousands of dollars from an investment account that the 
plaintiff maintained with the defendant.  The plaintiff asserted 
that the defendant terminated the employee's employment but took 
no action to inform the plaintiff that the employment had been 
No. 
2006AP813   
 
5 
 
terminated or that the termination was for forgery and theft.  
The circuit court entered judgment by default against the 
employee.  Each of the remaining co-defendants was eventually 
dismissed from the action.   
¶9 
The plaintiff alleged that the defendant is liable to 
the plaintiff for (1) vicarious liability for the employee's 
unlawful acts of conversion, (2) intentional misrepresentation, 
(3) 
strict 
responsibility 
misrepresentation, 
(4) 
negligent 
misrepresentation, (5) breach of fiduciary duty, (6) negligence, 
(7) breach of the implied duty of good faith in performance of a 
contract, and (8) breach of contract.  The plaintiff demanded 
damages from the defendant, including compensatory damages and 
punitive damages.  
¶10 After hearing the parties on the question whether the 
defendant had disobeyed discovery orders, the circuit court 
agreed with the plaintiff's characterization of the defendant's 
conduct during discovery, and, as a sanction for the defendant's 
violating discovery orders, the circuit court ordered the 
defendant's pleadings struck and granted the plaintiff's motion 
for judgment by default pursuant to Wis. Stat. § (Rule) 
804.12(2)(a) authorizing a circuit court to sanction a party for 
failure to comply with discovery orders.  
¶11 No judgment by default was rendered or entered because 
damages had not been determined.  Thus the circuit court's order 
also 
provided 
that 
the 
defendant 
would 
be 
entitled 
to 
participate in an evidentiary hearing to determine the amount of 
damages.  Approximately two weeks after holding the evidentiary 
No. 
2006AP813   
 
6 
 
hearing, the circuit court rendered a default judgment against 
the defendant for the plaintiff's damages as determined by the 
circuit court.6  The judgment was then entered three days after 
it was rendered.7 
I 
¶12 We examine first the defendant's argument that the 
circuit court violated the defendant's right of trial by jury 
under Article I, Section 5 of the Wisconsin Constitution when it 
denied the defendant's motion for a jury trial on the issue of 
damages.   
¶13 The defendant's motion for a jury trial on the issue 
of damages came after the circuit court granted the plaintiff's 
motion for judgment by default against the defendant as a 
sanction, pursuant to Wis. Stat. § (Rule) 804.12(2)(a), for 
failing 
to 
comply 
with 
discovery 
orders 
and 
ordered 
an 
evidentiary hearing on damages.  The defendant had neither 
demanded a jury trial in the circuit court nor paid the jury fee 
in a timely fashion before the pleadings were struck.  A co-
defendant, however, did demand a jury trial and did pay the jury 
                                                 
6 "A judgment is rendered by the court when it is signed by 
the judge or by the clerk at the judge's written discretion."  
3A Jay E. Grenig, Wisconsin Practice Series: Civil Procedure 
§ 602.4, at 172 (3d ed. 2003).   
7 "A judgment is entered when it is filed in the office of 
the clerk of court."  3A Grenig, supra note 6, § 602.4, at 172. 
No. 
2006AP813   
 
7 
 
fee timely.8  The co-defendant was later dismissed from the case.  
Because neither party in the instant case raised or briefed the 
issue, the question whether a co-defendant's timely demand for a 
jury trial and timely payment of the jury fee suffices to enable 
the defendant to claim a constitutional right of trial by jury 
is not before the court.  We assume (without deciding) that for 
purposes of the instant review the co-defendant's demand for 
trial by jury and payment of the jury fee can be attributed to 
the defendant.   
¶14 Article I, Section 5 of the Wisconsin Constitution 
provides in full as follows: 
The right of trial by jury shall remain inviolate, and 
shall extend to all cases at law without regard to the 
amount in controversy; but a jury trial may be waived 
by the parties in all cases in the manner prescribed 
by law.  Provided, however, that the legislature may, 
from time to time, by statute provide that a valid 
verdict, in civil cases, may be based on the votes of 
a specified number of the jury, not less than five-
sixths thereof. 
¶15 Interpretation of the Wisconsin Constitution presents 
a question of law that this court determines independently of 
the circuit court and court of appeals but benefiting from their 
analyses.9  
                                                 
8 The circuit court ordered that "[o]n or before April 10, 
2005, the party demanding a trial by jury shall pay to the 
office of the clerk . . . the jury fee required by statute" and 
that ""[i]n the event such fee is not paid by that date, the 
right of trial by jury will be deemed waived."   
9 Ferdon ex rel. Petrucelli v. Wis. Patients Comp. Fund, 
2005 WI 125, ¶58, 284 Wis. 2d 573, 701 N.W.2d 440. 
No. 
2006AP813   
 
8 
 
¶16 The defendant argues that if its constitutional right 
of trial by jury is to remain inviolate, it cannot be denied a 
jury trial on the issue of damages in the present case.   
¶17 We agree with the defendant that the Article I, 
Section 5 right of trial by jury extends to the issue of 
damages.  In Jennings v. Safeguard Ins. Co., 13 Wis. 2d 427, 109 
N.W.2d 90 (1961), this court held that the right of trial by 
jury under Article I, Section 5 extends to "all issues of fact, 
including that of damages."10  Nevertheless, a party may waive a 
trial by jury on the issue of damages "in the manner prescribed 
by law."    
¶18 The question presented is whether the defendant waived 
its right of trial by jury in the manner prescribed by law.  The 
court has addressed waiver in previous cases.  The court has 
declared that a defendant "has no vested right under art. I, 
sec. 5 [of the Wisconsin Constitution], to the manner or time in 
which [the right of trial by jury] may be exercised or waived, 
since these are merely procedural matters to be determined by 
law."11   
¶19 The manner in which the Article I, Section 5 right of 
trial by jury may be waived is governed principally by Wis. 
                                                 
10 Jennings v. Safeguard Ins. Co., 13 Wis. 2d 427, 431, 109 
N.W.2d 90 (1961) (citing Borowicz v. Hamann, 193 Wis. 324, 214 
N.W. 431 (1927)).   
11 Phelps v. Physicians Ins. Co. of Wis., Inc., 2005 WI 85, 
¶32, 282 Wis. 2d 69, 698 N.W.2d 643 (quoting State ex rel. 
Prentice v. County Court, 70 Wis. 2d 230, 240, 234 N.W.2d 283 
(1975)) (quotation marks omitted).   
No. 
2006AP813   
 
9 
 
Stat. § (Rule) 805.01(3).12  Section (Rule) 805.01(3) sets forth 
two ways in which the right of trial by jury may be waived.  
First, a party's failure to demand a jury trial timely in 
accordance with § (Rule) 805.01(2) constitutes a waiver of the 
jury trial right.  Second, the parties or their attorneys of 
record may waive the right by written stipulation filed with the 
court or by oral stipulation made in open court and entered in 
the record. 
¶20 Wisconsin 
Stat. 
§ (Rule) 
805.01(3) 
is 
not 
the 
exclusive provision governing the manner in which the state 
constitutional right of trial by jury may be waived.  Under 
                                                 
12 Wisconsin Stat. § (Rule) § 805.01 provides in full as 
follows: 
(1) Right preserved. The right of trial by jury as 
declared in article I, section 5, of the constitution 
or as given by a statute and the right of trial by the 
court shall be preserved to the parties inviolate. 
(2) Demand. Any party entitled to a trial by jury or 
by the court may demand a trial in the mode to which 
entitled at or before the scheduling conference or 
pretrial conference, whichever is held first.  The 
demand may be made either in writing or orally on the 
record. 
(3) Waiver. The failure of a party to demand in 
accordance with sub. (2) a trial in the mode to which 
entitled constitutes a waiver of trial in such mode.  
The right to trial by jury is also waived if the 
parties or their attorneys of record, by written 
stipulation filed with the court or by an oral 
stipulation made in open court and entered in the 
record, consent to trial by the court sitting without 
a jury.  A demand for trial by jury made as herein 
provided may not be withdrawn without the consent of 
the parties. 
No. 
2006AP813   
 
10 
 
§ 814.61(4), for example, a party may waive the jury trial right 
by failing to pay the jury fee timely.  Section 814.61(4) states 
that if the jury fee is not paid timely, "no jury may be called 
in the action, and the action may be tried to the court without 
a jury."13 
¶21 Moreover, "Wisconsin Stat. §§ 805.01(3) and 814.61 are 
"but two examples of how waiver [of the Article I, Section 5 
right of trial by jury] may be effectuated."14  
¶22 As both Wis. Stat. § (Rule) 805.01(3) and Wis. Stat. 
§ 814.61 make clear, a party's "waiver" of the Article I, 
Section 5 right of trial by jury need not be a "waiver" in the 
strictest 
sense 
of 
that 
word, 
that 
is, 
an 
"intentional 
relinquishment of a known right."15  Instead, a party may "waive" 
the Article I, Section 5 right of trial by jury by failing to 
assert the right timely (as when a party fails to demand a jury 
trial timely in accordance with § (Rule) 805.01) or by violating 
a law setting conditions on the party's exercise of the jury 
                                                 
13 Wisconsin Stat. § 814.61(4) provides in full as follows:  
Jury Fee.  For a jury in all civil actions, except a 
garnishment action under ch. 812, a nonrefundable fee 
of $6 per juror demanded to hear the case to be paid 
by the party demanding a jury within the time 
permitted to demand a jury trial.  If the jury fee is 
not paid, no jury may be called in the action, and the 
action may be tried to the court without a jury. 
14 Phelps, 282 Wis. 2d 69, ¶28. 
15 State v. Kelty, 2006 WI 101, ¶18 n.11, 294 Wis. 2d 62, 
716 N.W.2d 886. 
No. 
2006AP813   
 
11 
 
trial right (as when a party fails to pay the jury fee timely in 
accordance with Wis. Stat. § 814.61).  
¶23 Two examples from the case law are instructive: State 
ex rel. Prentice v. County Court, 70 Wis. 2d 230, 240, 234 
N.W.2d 283 (1975), and Phelps v. Physicians Insurance Co. of 
Wisconsin, Inc., 2005 WI 85, 282 Wis. 2d 69, 698 N.W.2d 643.   
¶24 In the Prentice case, Prentice waived her right to a 
jury trial by failing to assert the right timely.  This form of 
"waiver" is more akin to "forfeiture" than to "waiver" in its 
strictest sense as an intentional relinquishment of a known 
right.  See State v. Kelty, 2006 WI 101, ¶18 n.11, 294 
Wis. 2d 62, 716 N.W.2d 886 (defining "forfeiture" as "the 
failure to make the timely assertion of a right" and as 
occurring "by operation of law without regard to the defendant's 
state of mind").  
¶25 Prentice was one day late in demanding a jury trial 
and paying her jury fee.  The applicable statute required 
Prentice to demand a jury trial and to pay the jury fee within 
20 days of joining issue.16  Prentice took 21 days.  The circuit 
court consequently denied Prentice's demand for a trial by jury. 
                                                 
16 The applicable statute, Wis. Stat. § 299.21 (3) (1971), 
provided as follows:  
Trial by jury. (a) Any party may, upon payment of the 
fees specified in par. (b), file a written demand for 
trial by jury.  If no party demands a trial by jury, 
the right to trial by jury is waived forever.  In 
eviction actions, such demand shall be filed at or 
before the time of joinder of issue; in all other 
actions within 20 days thereafter. 
No. 
2006AP813   
 
12 
 
¶26 This court rejected Prentice's argument that the 
applicable statute operated in violation of her rights under 
Article I, Section 5.  The court held that Prentice had waived 
her right of trial by jury because the applicable statute "is a 
law which reasonably prescribes that failure of a party to act 
within twenty days constitutes a waiver of jury trial in cases 
to which [the statute] applies."17   
¶27 Furthermore, we recognized in Prentice that the 
defendant's waiver of the jury trial right puts the defendant's 
demand for a jury trial at the discretion of the circuit court.  
We stated that once a defendant fails to meet the requirements 
of the statute limiting the time in which to demand a jury trial 
and to pay the jury fee, the defendant "loses her right and the 
matter of a jury trial becomes discretionary with the trial 
court."18  Prentice shows that this court has sustained as 
constitutional a circuit court's discretionary decision to deny 
a defendant's right of jury trial based on the defendant's 
waiver of the right. 
                                                                                                                                                             
(b) The fee for a jury is $24, plus an additional 
amount as suit tax which will result in a suit tax 
payment of the amount which would have been payable 
had the action been commenced in circuit court and 
additional clerk's fees of $6. 
Prentice, 70 Wis. 2d at 239. 
17 Id.  
18 Id. at 240.   
No. 
2006AP813   
 
13 
 
¶28 In 
Phelps, 
the 
Physicians 
Insurance 
Company 
of 
Wisconsin (PIC) asserted the right of trial by jury timely but 
then waived the right by failing to comply with a law setting 
conditions on PIC's exercise of the right that it had timely 
asserted.  PIC timely asserted its right to a jury trial but 
then failed to pay the jury fee timely in accordance with the 
circuit court's scheduling order and local rules.19  Relying upon 
Wis. Stat. § 814.61, the court concluded that PIC's failure to 
pay the jury fee timely constituted a waiver of the jury trial 
right that PIC had timely asserted.20 
¶29 Prentice's and PIC's actions plainly did not evince 
the intent to relinquish a right known to them.  Prentice 
"waived" her right to a jury trial by failing to assert the 
right timely.  PIC asserted the jury trial right timely but then 
waived the right by failing to comply with a statute setting 
conditions on PIC's exercise of the right.  
¶30 Thus the question presented in the instant case is 
whether by failing to comply with the circuit court's discovery 
orders and by incurring a judgment by default as a sanction, the 
defendant has waived its state constitutional right of trial by 
jury in the manner prescribed by law.  More specifically, the 
question presented is whether Wis. Stat. § (Rule) 804.12(2), 
governing sanctions for discovery violations, and Wis. Stat. 
§ (Rule) 
806.02, 
governing 
default 
judgments, 
are 
laws 
                                                 
19 Phelps, 282 Wis. 2d 69, ¶15. 
20 Id., ¶¶30-32.   
No. 
2006AP813   
 
14 
 
prescribing the manner in which a party's right of trial by jury 
is waived.  
¶31 Section (Rule) 804.12(2)(a) authorizes a circuit court 
to strike out pleadings or parts thereof and render a judgment 
by default against a disobedient party who has failed to comply 
with a circuit court's discovery orders.21  It provides in 
relevant part as follows: 
(2) Failure to comply with order.  
(a) If a party . . . fails to obey an order to provide 
or permit discovery . . . the court in which the 
action is pending may make such orders in regard to 
the failure as are just, and among others the 
following: 
. . . . 
3. An order striking out pleadings or parts thereof, 
or staying further proceedings until the order is 
obeyed, or dismissing the action or proceeding or any 
part thereof, or rendering a judgment by default 
against the disobedient party . . .  (emphasis added). 
¶32 Wisconsin 
Stat. 
§ (Rule) 
806.02 
governs 
default 
judgments.  Wisconsin Stat. § (Rule) 806.02 provides in relevant 
part as follows: 
                                                 
21 See also Wis. Stat. § (Rule) 805.03, providing in 
relevant part as follows:  
For failure of any claimant to prosecute or for 
failure of any party to comply with the statutes 
governing procedure in civil actions or to obey any 
order of court, the court in which the action is 
pending may make such orders in regard to the failure 
as are just, including but not limited to orders 
authorized under s. 804.12(2)(a). . . . 
No. 
2006AP813   
 
15 
 
Default Judgment (1) A default judgment may be 
rendered as provided in subs. (1) to (4) if no issue 
of law or fact has been joined and if the time for 
joining issue has expired.  Any defendant appearing in 
an action shall be entitled to notice of motion for 
judgment. 
(2) . . . 
the 
plaintiff 
may 
move 
for 
judgment 
according to the demand of the complaint. . . .  If 
proof of any fact is necessary for the court to give 
judgment, the court shall receive the proof.  
. . . . 
(5) A default judgment may be rendered against any 
defendant who has appeared in the action but who fails 
to appear at trial.  If proof of any fact is necessary 
for the court to render judgment, the court shall 
receive the proof.   
¶33 The interpretation of Wis. Stat. §§ (Rules) 804.12(2) 
and 806.02 is a question of law that we determine independently 
of the circuit court and court of appeals but benefiting from 
their analyses.22 
¶34 Wisconsin Stat. §§ (Rules) 804.12(2)(a) and 806.02 are 
rules of pleading, practice, and procedure that were adopted by 
this court pursuant to Wis. Stat. § 751.12.  Wisconsin Stat. 
§ 751.12 provides in relevant part as follows: 
Rules of pleading and practice.  (1) The state supreme 
court shall, by rules promulgated by it from time to 
time, regulate pleading, practice, and procedure in 
judicial proceedings in all courts, for the purposes 
of simplifying the same and of promoting the speedy 
determination of litigation upon its merits.  The 
rules shall not abridge, enlarge, or modify the 
substantive rights of any litigant. . . .  
                                                 
22 Waters ex rel. Skow v. Pertzborn, 2001 WI 62, ¶16, 243 
Wis. 2d 703, 627 N.W.2d 497. 
No. 
2006AP813   
 
16 
 
(2) All statutes relating to pleading, practice, and 
procedure may be modified or suspended by rules 
promulgated under this section. . . .   
. . . . 
(4) This section shall not abridge the right of the 
legislature to enact, modify, or repeal statutes or 
rules relating to pleading, practice, or procedure. 
(5) The judicial council shall act in an advisory 
capacity to assist the court in performing its duties 
under this section. 
¶35 A rule adopted by this court in accordance with Wis. 
Stat. § 751.12 is numbered as a statute, is printed in the 
Wisconsin Statutes, may be amended by both the court and the 
legislature,23 has been described by this court as "a statute 
promulgated under this court's rule-making authority," and has 
the force of law.24  Thus if the defendant relinquished its right 
of trial by jury in the manner prescribed by Wis. Stat. 
§§ (Rules) 804.12(2)(a) and 806.02, rules of practice and 
procedure, 
then 
the 
defendant 
has 
waived 
its 
state 
constitutional right to a jury trial on the issue of damages.25   
                                                 
23 Both Wis. Stat. §§ (Rules) 804.12 and 806.06 have been 
amended by statute. 
24 Trinity Petroleum, Inc. v. Scott Oil Co., Inc., 2007 WI 
88, ¶¶32, 39, 302 Wis. 2d 299, 735 N.W.2d 1; Waters, 243 
Wis. 2d 703, ¶16.   
25 This court has previously recognized that a court-
promulgated rule of pleading, practice, or procedure may 
prescribe the manner in which the state constitutional right to 
trial by jury is waived.  See Phelps, 282 Wis. 2d 69, ¶28 
(stating that Wis. Stat. § (Rule) 805.03 provides an example of 
how waiver of the jury trial right may be effectuated).   
No. 
2006AP813   
 
17 
 
¶36 Wisconsin 
Stat. 
§ (Rule) 
804.12(2), 
governing 
sanctions for violation of discovery orders, allows a circuit 
court to render a judgment by default against a disobedient 
defendant.  It is well established that "judgment by default" 
(the term used in Wis. Stat. § 804.12(2)(a)3.) is identical to 
"default judgment" (the term used in Wis. Stat. § 806.02).  For 
example, in Split Rock Hardwoods v. Lumber Liquidators, Inc., 
2002 WI 66, ¶42 n.15, 253 Wis. 2d 238, 646 N.W.2d 19, Justice 
Prosser explained on behalf of the court that "[a] court may 
enter default judgment under Wis. Stat. § 804.12(2)(a) against a 
party for failure to comply with a discovery order" (emphasis 
added) 
(citing 
Midwest 
Developers 
v. 
Goma 
Corp., 
121 
Wis. 2d 632, 650, 360 N.W.2d 554 (Ct. App. 1984)).  The circuit 
court ordered a default judgment to be rendered against the 
defendant in the present case for failure to comply with a 
discovery order, and we look to the law governing default 
judgments to determine whether the defendant has a right of 
trial by jury on the issue of damages.26   
¶37 The defendant on review accepts that the default 
judgment was properly rendered in the present case.  According 
                                                 
26 The Wisconsin courts consistently apply Wis. Stat. 
§ (Rule) 806.02 in cases where a default judgment is rendered 
under Wis. Stat. § 804.12(2)(a).  See our discussion, ¶¶41-42, 
infra, of Brandon Apparel Group, Inc. v. Pearson Props., Ltd., 
2001 WI App 205, 247 Wis. 2d 521, 634 N.W.2d 544; Smith v. 
Golde, 224 Wis. 2d 518, 528, 530, 592 N.W.2d 287 (Wis. Ct. App. 
1999); Kerans v. Manion Outdoors Co., 167 Wis. 2d 122, 130-31, 
482 N.W.2d 110 (Ct. App. 1992); and Midwest Developers v. Goma 
Corp., 121 Wis. 2d 632, 651, 360 N.W.2d 554 (Ct. App. 1984).  
No. 
2006AP813   
 
18 
 
to Wis. Stat. § (Rule) 806.02, a default judgment may be 
rendered if no issue of law or fact has been joined.  In the 
present case no issue of law or fact has been joined because the 
circuit court struck the defendant's pleadings; the circuit 
court thus rendered a judgment by default that satisfies Wis. 
Stat. § (Rule) 806.02 governing default judgment.27 
¶38 According to Wis. Stat. § (Rule) 806.02, if proof of 
any fact, including damages, is necessary for the circuit court 
to render judgment by default, the circuit court shall receive 
the proof.  A party who defaults admits liability but not the 
                                                 
27 The case law makes clear that Wis. Stat. § (Rule) 806.02 
governs cases in which the defendant answers but the circuit 
court strikes the defendant's answer.  For example, we stated in 
Split Rock Hardwoods v. Lumber Liquidators, Inc., 2002 WI 66, 
253 Wis. 2d 238, 646 N.W.2d 19, that a party is subject to 
default judgment under Wis. Stat. § (Rule) 806.02 once the 
circuit court has struck the party's answer.  Writing for the 
Split Rock majority, Justice Prosser explained that "[a] 
successful motion to strike an answer will normally lead to a 
default judgment."  Split Rock, 253 Wis. 2d 238, ¶38.  
The Wisconsin courts routinely apply Wis. Stat. § (Rule) 
806.02 in cases in which the defendant answers but the circuit 
court strikes the defendant's answer.  See, e.g., Leonard v. 
Cattahach, 214 Wis. 2d 236, 571 N.W.2d 444 (Ct. App. 1997) 
(affirming the circuit court's decision striking the defendant's 
untimely answer and entering default judgment against the 
defendant); 
Gerth 
v. 
American 
Star 
Insurance 
Co., 
166 
Wis. 2d 1000, 480 N.W.2d 836 (Ct. App. 1992) (same); Martin v. 
Griffin, 117 Wis. 2d 438, 344 N.W.2d 206 (Ct. App. 1984) (same).    
No. 
2006AP813   
 
19 
 
amount of damages.28  Wisconsin Stat. § (Rule) 806.02(2) and (5) 
do not bind the court to a single procedure for deciding factual 
issues when a default judgment is entered but instead provide 
only that "[i]f proof of any fact is necessary for the court to 
give judgment, the court shall receive the proof."29  The 
Judicial Council Committee's Note to the 1978 Supreme Court 
                                                 
28 See 3A Grenig, supra note 6, § 602.3, at 171 ("If the 
court determines the defendant is in default, the factual 
allegations of the complaint, except those relating to the 
amount of damages, will be taken as true.") (citing Charles Alan 
Wright et al., Federal Practice and Procedure: Civil 2d § 2688 
(pertaining 
to 
Rule 
55 
of 
the 
Federal 
Rules 
of 
Civil 
Procedure)). 
"We look to federal cases [applying Federal Rule 55] 
because Wis. Stat. § 806.02 is similar in language and effect to 
Fed. R. Civ. P. 55 governing default judgments."  Apex 
Electronics Corp. v. Gee, 217 Wis. 2d 378, 389 n.11, 577 
N.W.2d 23 (1998) (citation omitted). 
"[T]he failure of an averment to state a valid claim for 
relief is fatal to a motion for default judgment."  Tridle ex 
rel. Shannon v. Horn, 2002 WI App 215, ¶11, 257 Wis. 2d 529, 652 
N.W.2d 418.   
29 Wisconsin Stat. § (Rule) 806.02 (2) provides:  
After filing the complaint and proof of 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 plaintiff may move for judgment 
according to the demand of the complaint.  If the 
amount of money sought was excluded from the demand 
for judgment, as required under s. 802.02 (1m), the 
court shall require the plaintiff to specify the 
amount of money claimed and provide that information 
to the court and to the other parties prior to the 
court rendering judgment.  If proof of any fact is 
necessary for the court to give judgment, the court 
shall receive the proof. 
No. 
2006AP813   
 
20 
 
order amending Wis. Stat. § (Rule) 806.02(5) to state in 
conformity with subsection (2) that the circuit court "shall 
receive the proof," in place of "shall hear the proof," explains 
that a circuit court receiving proof of any fact in a default 
judgment matter has "the option of in-chamber consideration of 
affidavits presented by attorneys" as well as "the option of 
hearing proof in open court."30 
¶39 Although Wis. Stat. § (Rule) 806.02, governing default 
judgments, does not explicitly address the question whether a 
defendant's default constitutes a waiver of the right of trial 
by jury on the issue of damages, the clear implication of the 
rule and the case law applying the rule is that by engaging in 
conduct that results in a default judgment the defendant has 
waived its right of trial by jury in the manner prescribed by 
Wis. Stat. § (Rule) 806.02, a rule of pleading, practice, and 
procedure.  A right of trial by jury on the issue of damages is 
inconsistent with the proposition that a circuit court has 
discretion to determine the nature of the hearing for deciding 
issues of fact and has discretion to determine the nature of the 
procedure for establishing damages, including the discretion to 
decide factual issues on the basis of affidavits presented by 
the attorneys.   
¶40 In Apex Electronics Corp. v. Gee, 217 Wis. 2d 378, 
387, 577 N.W.2d 23 (1998), for example, a case in which the 
                                                 
30 Order, In re the Rules of Civil Procedure, 82 Wis. 2d ix, 
xvi (1978).   
No. 
2006AP813   
 
21 
 
circuit court rendered default judgment on a punitive damages 
claim, this court held that if proof of any fact is necessary 
for the circuit court to give default judgment under Wis. Stat. 
§ (Rule) 806.02, "[t]he procedure for obtaining the additional 
proof . . . is within the discretion of the circuit court."  In 
Hedtcke v. Sentry Ins. Co., 109 Wis. 2d 461, 478 n.5, 326 
N.W.2d 727 (1982), the court similarly stated that "[u]pon entry 
of a default judgment, the circuit court may hold a hearing or 
inquiry to determine damages" (citations omitted). 
¶41 The case law further demonstrates that when default 
judgment 
is 
rendered 
pursuant 
to 
Wis. 
Stat. 
§ (Rule) 
804.12(2)(a), governing sanctions for a violation of a circuit 
court's discovery order, the procedure for deciding the issue of 
damages lies within the discretion of the circuit court.  The 
court of appeals has consistently looked to Wis. Stat. § (Rule) 
806.02 when determining the proper procedure for determining 
No. 
2006AP813   
 
22 
 
damages under Wis. Stat. § (Rule) 804.12(2)(a) when a default 
judgment was rendered.31  
¶42 For example, in Brandon Apparel Group, Inc. v. Pearson 
Props., Ltd., 2001 WI App 205, 247 Wis. 2d 521, 634 N.W.2d 544, 
the circuit court ordered judgment by default against a third-
party defendant as a sanction for the third-party defendant's 
failure to appear for a deposition as ordered.32  After 
determining that the circuit court had not erroneously exercised 
its discretion in ordering default judgment under Wis. Stat. 
§ (Rule) 804.12(2)(a),33 the court of appeals applied Wis. Stat. 
§ (Rule) 806.02(2) (governing default judgment) to determine 
whether the circuit court was required to receive additional 
evidence to assess damages.34  The Brandon Apparel court of 
                                                 
31 See, e.g., Smith v. Golde, 224 Wis. 2d 518, 528, 530, 592 
N.W.2d 287 (Wis. Ct. App. 1999) (holding that the circuit court 
did not erroneously exercise its discretion in ordering default 
judgment under Wis. Stat. § (Rule) 804.12(2)(a); applying Wis. 
Stat. § (Rule) 806.02(2) to determine whether the court was 
required to receive additional evidence to assess damages); 
Kerans, 167 Wis. 2d at 130-31 (holding that the circuit court 
did not erroneously exercise its discretion in ordering default 
judgment under Wis. Stat. § (Rule) 804.12(2)(a); applying Wis. 
Stat. § (Rule) 806.02(5) to determine whether the circuit court 
erred by not requiring proof of damages before entering the 
judgment); Midwest Developers v. Goma Corp., 121 Wis. 2d 632, 
651, 360 N.W.2d 554 (Ct. App. 1984) (holding that the circuit 
court did not erroneously exercise its discretion in ordering 
default judgment under Wis. Stat. § (Rule) 804.12(2); applying 
Wis. Stat. § (Rule) 806.02(2) to determine whether the court 
erred in assessing damages without an evidentiary hearing).   
32 Brandon Apparel, 247 Wis. 2d 521, ¶9.   
33 Id., ¶¶11, 19.   
34 Id., ¶20.    
No. 
2006AP813   
 
23 
 
appeals further ruled that when receiving proof of any fact 
prior to rendering judgment by default, the circuit court may 
receive proof "through an evidentiary hearing or by means of 
affidavits."35 
¶43 This court has similarly recognized, in a case in 
which it rendered judgment against a disobedient party as a 
sanction for misconduct, that the procedure for determining 
damages lies within the circuit court's discretion.  In Chevron 
Chemical Co. v. Deloitte & Touche, 176 Wis. 2d 935, 501 
N.W.2d 15 (1993) (Chevron I), which was not a default judgment 
case, this court imposed judgment, "on the authority provided by 
secs. 805.03 and 804.12, Stats., and the inherent authority 
courts have to enter judgment as a sanction,"36 against Deloitte, 
a disobedient defendant, as a sanction for repeated, flagrant, 
and intentional misconduct.  The Chevron I court remanded the 
cause to the circuit court to determine the amount of damages to 
be awarded against Deloitte and instructed the circuit court 
that on remand "the matter of the amount of damages is to be 
treated as it is in typical default judgment cases."37     
¶44 On remand the circuit court determined damages on the 
basis of the circuit court record, without an evidentiary 
                                                 
35 Id. (citation omitted). 
36 Chevron 
Chemical 
Co. 
v. 
Deloitte 
& 
Touche, 
176 
Wis. 2d 935, 947, 501 N.W.2d 15 (1993) (Chevron I).  See also 
Chevron Chem. Co. v. Deloitte & Touche LLP, 207 Wis. 2d 43, 48, 
557 N.W.2d 775 (1997) (Chevron II).  
37 Chevron I, 176 Wis. 2d at 950.   
No. 
2006AP813   
 
24 
 
hearing, even though Deloitte wanted an evidentiary hearing with 
all the characteristics of a bifurcated trial on damages.38  In 
Chevron Chemical Co. v. Deloitte & Touche LLP, 207 Wis. 2d 43, 
557 N.W.2d 775 (1997) (Chevron II), this court explained that in 
Chevron I it had intended to leave "the nature of the hearing on 
damages to the circuit court's discretion," just as in typical 
default judgment situations.39  The Chevron II court further held 
that the circuit court had not erroneously exercised its 
discretion when it declined to hold an evidentiary hearing and 
instead determined damages on the basis of the trial record, 
with additional briefing and oral argument.40   
¶45 Wisconsin Stat. §§ (Rules) 804.12(2)(a) and 806.02 and 
case law interpreting and applying these rules establish the 
manner by which a party waives its Article I, Section 5 right of 
trial by jury on the issue of damages.  Under these court rules, 
                                                 
38 Chevron II, 207 Wis. 2d at 46.   
Based on Deloitte's request, the circuit court concluded 
that Deloitte wanted a jury trial on damages.  Plaintiff-
Respondent-Cross Appellant-Petitioner's Brief Upon Review at 8-9 
& n.6, in Chevron Chem. Co. v. Deloitte & Touche LLP, 207 
Wis. 2d 43, 557 N.W.2d 775 (1997).    
39 Chevron II, 207 Wis. 2d at 50. 
Chevron II made clear that Wis. Stat. § (Rule) 806.02, the 
law governing default judgment, did not govern that case.  
Chevron II, 207 Wis. 2d at 48.  The Chevron II court explained 
that "issues of fact and law were joined [in that case] and the 
defendant appeared at trial."  Id.  Judgment against the 
defendant in Chevron I had been entered by the Chevron I supreme 
court on appellate review as a sanction.  Id.   
40 Chevron II, 207 Wis. 2d at 44.   
No. 
2006AP813   
 
25 
 
a defendant's failure to comply with the circuit court's 
discovery orders, resulting in default judgment against the 
defendant, constitutes a waiver of the defendant's state 
constitutional right to a jury trial on the issue of damages.  
Accordingly, we conclude that the circuit court did not violate 
the defendant's right of trial by jury under Article I, Section 
5 of the Wisconsin Constitution when, adhering to Wis. Stat. 
§§ (Rules) 804.12(2) and 806.02, it denied the defendant's 
motion for a jury trial on the issue of damages.   
¶46 Our decision in the present case is buttressed by 
federal cases addressing the question whether the Seventh 
Amendment41 right of trial by jury in civil cases survives a 
default judgment or sanctions for a party violating a discovery 
order.   
¶47 This court, in construing Article I, Section 5 of the 
Wisconsin Constitution, may look for guidance to federal 
decisions interpreting the Seventh Amendment.42  Because the 
                                                 
41 The Seventh Amendment to the United States Constitution 
provides as follows: "In Suits at common law, where the value in 
controversy shall exceed twenty dollars, the right of trial by 
jury shall be preserved, and no fact tried by a jury, shall be 
otherwise re-examined in any Court of the United States, than 
according to the rules of the common law." 
42 Markweise v. Peck Foods Corp., 205 Wis. 2d 208, 225, 556 
N.W.2d 326 (Ct. App. 1996) ("The right to a jury trial in civil 
cases that is guaranteed by Article I, § 5 of the Wisconsin 
Constitution is substantially similar to that right guaranteed 
by 
the 
Seventh 
Amendment 
to 
the 
United 
States 
Constitution . . . .  The Seventh Amendment jury-trial right 
does not apply to the states.  Nevertheless, we may be guided by 
the federal cases interpreting that provision.") (citation 
omitted). 
No. 
2006AP813   
 
26 
 
Wisconsin rules governing default judgments and sanctions for 
violations of discovery orders mirror the federal rules, federal 
law is also instructive in interpreting the Wisconsin rules.  
Rule 55 of the Federal Rules of Civil Procedure is similar to 
Wis. Stat. § (Rule) 806.02 governing default judgments and may 
guide our interpretation of the Wisconsin statute.43  Rule 
37(b)(2) of the Federal Rules of Civil Procedure is essentially 
identical 
to 
Wis. 
Stat. 
§ (Rule) 
804.12(2)(a) 
governing 
sanctions for violation of discovery orders.44   
¶48 The federal courts agree that a defendant's default 
extinguishes the Seventh Amendment right to a jury trial on the 
                                                 
43 "We look to federal cases because Wis. Stat. § 806.02 is 
similar in language and effect to Fed. R. Civ. P. 55 governing 
default judgments."  Apex Electronics. Corp. v. Gee, 217 
Wis. 2d 378, 389 n.11, 577 N.W.2d 23 (1998) (citation omitted).   
See also Midwest Developers v. Goma Corp., 121 Wis. 2d 632, 
651-52, 360 N.W.2d 554 (Ct. App. 1984) ("When there are no 
Wisconsin cases on point, an appellate court can look to federal 
decisions for aid in determining the intent of a Wisconsin 
statute if a federal statute exists that is similar in language 
and operation.  Federal Rule of Civil Procedure 55 is similar in 
language and effect to sec. 806.02, Stats.") (footnote and 
internal citations omitted).     
44 Compare 
Fed. 
R. 
Civ. 
P. 
37(b)(2)(A) 
("If 
a 
party . . . fails to obey an order to provide or permit 
discovery . . . the court where the action is pending may issue 
further just orders.  They may include the following: . . . (vi) 
rendering 
a 
default 
judgment 
against 
the 
disobedient 
party . . . .") 
with 
Wis. 
Stat. 
§ 804.12(2)(a) 
("If 
a 
party . . . fails to obey an order to provide or permit 
discovery . . . the court in which the action is pending may 
make such orders in regard to the failure as are just, and among 
others the following: . . . 3. An order striking out pleadings 
or parts thereof . . . or rendering a judgment by default 
against the disobedient party . . . .").  
No. 
2006AP813   
 
27 
 
question of damages.45  As one federal court of appeals 
explained: "It is . . . clear that in a default case neither the 
plaintiff nor the defendant has a constitutional right to a jury 
trial on the issue of damages.  Assuming that [the party] had 
the right to a jury trial he waived that right when he 
purposefully chose not to answer the suit and timely request 
such a trial."46  For a recitation of the history (from the first 
volume of Blackstone's Commentaries in 1765 until 1877) of the 
assessment of damages without a jury upon a default judgment 
rendered under court rules, see Raymond v. Danbury & Norwalk 
Railroad Co., 20 Fed. Cas. 332 (C.C. Conn. 1877) (No. 11,593).47  
Federal law, like Wisconsin law, places the procedure for 
                                                 
45 See 10 James Wm. Moore et al., Moore's Federal Practice 
§ 55.32[2][e], at 55-50 (3d ed. 2007) ("[T]he defaulting party 
is entitled to contest damages and participate in a hearing on 
damages, if one is held, but has no right to a jury trial, 
either under the federal rules or under the Constitution.  The 
defaulting party waives normal rights to a jury trial by its 
default.") (footnote omitted); 10A Charles Alan Wright et al., 
Federal Practice and Procedure § 2688 at 69 (3d ed. 1998) 
(although "the court may order a jury trial as to damages in a 
default situation if it seems to be the best means of assessing 
damages . . . neither side has a right to demand a jury trial on 
damages.") (footnotes omitted).   
46 In re Dierschke, 975 F.2d 181, 185 (5th Cir. 1992)  
(quotation marks and footnote omitted).   
47 See also Henry v. Sneiders, 490 F.2d 315, 318 (9th Cir. 
1974) and cases cited therein; Fidelity & Deposit Co. v. United 
States, 187 U.S. 315, 319-21 (1902); Dyson v. Rhode Island Co., 
57 A. 771 (1904) (tracing the history of assessing damages in 
default cases in the courts of England).  
No. 
2006AP813   
 
28 
 
determining damages in a default judgment case within the 
discretion of the trial court.48   
¶49 The federal courts have also held that no Seventh 
Amendment right to a jury trial on damages exists in cases in 
which default judgment was ordered as a sanction for discovery 
violations.49   
¶50 The federal cases support our conclusion in the 
present case that by violating a circuit court's discovery 
                                                 
48 10 Moore et al., supra note 45, § 55.32[2][c], at 55-48 
("When the amount of damages is not certain and cannot be 
determined from the record, the court must make further inquiry.  
However, the court need not hold an evidentiary hearing with 
oral testimony"); § 55.32[2][d], at 55-49 ("[T]he court has the 
discretion to hold a hearing or inquest into the amount of 
damages") (footnote omitted); § 55.32[2][e], at 55-50 ("The 
court may, in its discretion, hold a jury trial on a request for 
a default judgment.") (footnote omitted). 
See 10A Wright et al., supra note 45, § 2688, at 57-58, 64 
(the court determines the nature of the hearing on damages). 
49 See Olcott v. Del. Flood Co., 327 F.3d 1115, 1124 (10th 
Cir. 2003) (holding, in a case in which the district court 
entered default judgment pursuant to Fed. R. Civ. P. 37(b)(2) 
for defendants' willful discovery violations, that "[d]efendants 
do not have a constitutional right to a jury trial following 
entry of default") (citations omitted); Goldman, Antonetti, 
Ferraiuoli, Axtmayer & Hertell v. Medfit Int'l, Inc., 982 F.2d 
686, 692 n.15 (1st Cir. 1993) ("[A]fter a default judgment has 
been entered under Fed. R. Civ. P. 37(b)(2), a party has no 
right 
to 
jury 
trial 
under 
either 
Fed. 
R. 
Civ. 
P. 
55(b)(2) . . . or 
the 
Seventh 
Amendment.") 
(citations 
and 
quotation marks omitted); Adriana Int'l Corp. v. Thoeren, 913 
F.2d 1406, 1414 (9th Cir. 1990), cert. denied sub nom. Lewis & 
Co. v. Thoeren, 498 U.S. 1109 (1991) (same) (citation omitted). 
See 10A Wright et al., supra note 45, § 2688, at 69 (in a 
default situation neither party has a right to demand a jury 
trial on damages).   
No. 
2006AP813   
 
29 
 
orders and by incurring a judgment by default, a party waives 
the constitutional right of trial by jury on the issue of 
damages.   
¶51 We acknowledge that at least one state supreme court 
has reached a conclusion that conflicts with our holding in the 
present case.  In Curbelo v. Ullman, 571 So. 2d 443 (Fla. 1990), 
the Florida Supreme Court held that "[w]hen a jury trial has 
been requested by the plaintiff, the defendant is still entitled 
to a jury trial on the issue of damages even though a default 
has been entered against the defendant for failure to answer or 
otherwise plead."50   
¶52 Wood v. Detroit Automobile Inter-Insurance Exchange, 
321 N.W.2d 653 (Mich. 1982), is consistent with our holding in 
the present case.  In Wood, the defendant answered but then 
violated the court's discovery order.  The court granted the 
plaintiff's motion for a default judgment.  On appeal, the 
Supreme Court of Michigan rejected the rule that a defendant's 
default constitutes a waiver of Michigan's state constitutional 
right of trial by jury when the trial court has an evidentiary 
hearing on damages.51  However, the Wood decision rests largely 
                                                 
50 Curbelo v. Ullman, 571 So. 2d 443, 444 (Fla. 1990) 
(citation omitted). 
51 Wood v. Detroit Auto. Inter-Ins. Exch., 321 N.W.2d 653, 
658-59 (1982). 
No. 
2006AP813   
 
30 
 
on the application of procedural rules that, unlike Wisconsin's 
Rules of Civil Procedure, made clear that a defendant's default 
could not serve as a waiver of Michigan's state constitutional 
right of trial by jury in civil cases.  The difference between 
Wood and the present case lies in Michigan's procedural rules 
governing the manner in which the right to trial by jury may be 
waived. 
¶53 The Wood court relied upon Michigan's default judgment 
rule, Rule 520 of the Michigan General Court Rules of 1963.52  In 
cases in which a trial court determined that further proceedings 
were 
necessary 
to 
determine 
damages 
in 
default 
judgment 
situations, Rule 520 expressly mandated "a right of trial by 
jury to the parties when and as required by the constitution."53  
The Wood court therefore held that "a defaulting party who has 
properly invoked his right to jury trial retains that right if a 
hearing is held to determine the amount of recovery."54     
                                                                                                                                                             
At the time of the Wood case, Article I, Section 14 of the 
Michigan Constitution provided in relevant part that "[t]he 
right of trial by jury shall remain, but shall be waived in all 
civil cases unless demanded by one of the parties in the manner 
prescribed by law."  See Wood, 321 N.W.2d at 657 (quoting Mich. 
Const. art. I, § 14 (1963)).   
52 Wood, 321 N.W.2d at 659-60.   
Rule 520 of the Michigan General Court Rules of 1963 
corresponds to Rule 2.603 of the Michigan Court Rules of 1985 
(2008).   
53 Wood, 321 N.W.2d at 659 (quoting Rule 520.2(2) of the 
Michigan General Court Rules of 1963) (emphasis omitted). 
54 Wood, 321 N.W.2d at 659.   
No. 
2006AP813   
 
31 
 
¶54 Unlike the Michigan General Court Rules of 1963, 
Wisconsin's Rules of Civil Procedure do not require the circuit 
court to recognize a defaulting defendant's state constitutional 
right of trial by jury when the court determines that an 
evidentiary hearing will be held to determine the amount of 
damages to be awarded.  Instead, the law in Wisconsin is clear 
that it lies within the circuit court's discretion to determine 
the appropriate procedure for deciding factual issues in default 
judgment cases and that the defaulting party therefore has no 
right of trial by jury.  This distinction between Michigan and 
Wisconsin law, pertaining not to the scope of the state 
constitutional right to jury trials in civil cases but rather to 
matters of procedural law governing waiver of that right, 
explains the different holding in Wood and in the instant case.   
¶55 For the reasons set forth, we conclude that the 
circuit court did not violate the defendant's right of trial by 
jury under Article I, Section 5 of the Wisconsin Constitution 
when it denied the defendant's motion for a jury trial on the 
issue of damages.  The defendant waived its right of trial by 
jury in the manner set forth in Wis. Stat. §§ (Rule) 804.12 and 
806.02 by violating the circuit court's discovery order and by 
incurring a judgment by default.  
                                                                                                                                                             
See also id. at 660 ("[T]he trial court in the case at bar, 
having determined that a hearing was necessary on the question 
of damages, was obliged to accord defendant its properly 
preserved right to jury trial.") (footnote omitted). 
No. 
2006AP813   
 
32 
 
 
II 
¶56 We next address the question whether the circuit court 
erred in denying the plaintiff's claim for punitive damages   
under Wis. Stat. § 895.043(3). 
¶57 The parties disagree about the basis for the circuit 
court's denial of the plaintiff's claim for punitive damages.  
They disagree about whether the circuit court denied the 
plaintiff's punitive damages claim after considering only the 
allegations of the complaint or whether the circuit court based 
its 
denial 
on 
evidence 
the 
plaintiff 
presented 
at 
the 
evidentiary hearing on damages.  
¶58 The plaintiff argues that the circuit court's denial 
of punitive damages was based on a procedural error, namely that 
the circuit court erroneously limited its determination of the 
plaintiff's punitive damages claim to the allegations in the 
complaint.  The plaintiff asks this court to reverse the circuit 
court's denial of punitive damages and remand the issue of 
punitive damages to the circuit court.  According to the 
plaintiff, this court should hold that the circuit court erred 
in limiting its determination of punitive damages to the 
allegations in the complaint.  
¶59 The defendant argues that the circuit court considered 
all the evidence presented and did not limit itself to 
considering the allegations in the complaint when addressing the 
plaintiff's claim for punitive damages.  According to the 
defendant, 
after 
examining 
the 
record 
the 
circuit 
court 
No. 
2006AP813   
 
33 
 
concluded as a matter of law that the plaintiff was not entitled 
to punitive damages.  The defendant asks this court to affirm 
the circuit court and hold that because the defendant was merely 
silent or failed to warn the plaintiff about the employee who 
converted the plaintiff's funds, the defendant is as a matter of 
law not subject to punitive damages. 
¶60 The court of appeals concluded that the circuit court 
erred in excluding the plaintiff's evidence supporting the award 
of punitive damages and remanded the issue of punitive damages 
to the circuit court. 
¶61 We turn first (A) to deciding whether a circuit court 
is limited to the allegations in the complaint in determining 
whether to award punitive damages in a judgment by default.  We 
then (B) examine the record to determine whether the circuit 
court limited its consideration of the issue of punitive damages 
to the allegations of the complaint.  After resolving these two 
questions, this court (C) determines whether the circuit court 
erred in denying the plaintiff's claim for punitive damages. 
A 
¶62 Whether a circuit court is limited to the allegations 
in the complaint in determining whether to award punitive 
damages in a judgment by default presents a question of law that 
No. 
2006AP813   
 
34 
 
this court determines independently of the circuit court and 
court of appeals but benefiting from these courts' analyses.55   
¶63 We agree with the court of appeals in the present case 
that the circuit court was required to determine whether proof 
of any fact was needed to determine whether the defendant acted 
"maliciously toward the plaintiff or in an intentional disregard 
of the rights of the plaintiff,"56 justifying an award of 
punitive damages.  The case law is clear that a circuit court is 
not 
limited 
to 
considering 
only 
the 
allegations 
of 
the 
complaint.  As a general proposition, some form of inquiry 
                                                 
55 See Apex Electronics Corp. v. Gee, 217 Wis. 2d 378, 384, 
577 N.W.2d 23 (1998) (whether the circuit court erred by 
awarding the plaintiff punitive damages solely on the basis of 
the complaint presents a question of law involving statutory 
interpretation).      
56 Wis. Stat. § 895.043(3).   
Section 895.043(3) sets forth the conduct that may give 
rise to punitive damages, providing in full that "[t]he 
plaintiff may receive punitive damages if evidence is submitted 
showing 
that 
the 
defendant 
acted 
maliciously 
toward 
the 
plaintiff or in an intentional disregard of the rights of the 
plaintiff." 
In 
order 
to 
meet 
the 
requirements 
of 
Wis. 
Stat. 
§ 895.043(3), the plaintiff's evidence must show that the 
defendant acted "with a purpose to disregard the plaintiff's 
rights, or [was] aware that his or her acts [were] substantially 
certain to result in the plaintiff's rights being disregarded."  
Strenke v. Hogner, 2005 WI 25, ¶38, 279 Wis. 2d 52, 694 
N.W.2d 296.  Such a showing requires that the defendant's "act 
or course of conduct [was] deliberate," that "the act or 
conduct . . . actually 
disregard[ed] 
the 
rights 
of 
the 
plaintiff," and that "the act or conduct [was] sufficiently 
aggravated to warrant punishment by punitive damages."  Strenke, 
279 Wis. 2d 52, ¶38. 
No. 
2006AP813   
 
35 
 
beyond the complaint is required to determine the merits of a 
punitive damages claim.   
¶64 Apex Electronics Corp. v. Gee, 217 Wis. 2d 378, 577 
N.W.2d 23 (1998), upon which the court of appeals relied, 
governs the instant case.  In Apex Electronics, the circuit 
court awarded judgment by default under Wis. Stat. § (Rule) 
806.02 on a punitive damages claim solely on the basis of the 
complaint.  Applying both Wis. Stat. § (Rule) 806.02 (governing 
default judgments) and § 895.043 (governing punitive damages), 
the supreme court concluded "that a circuit court entering a 
default judgment on a punitive damages claim must make inquiry 
beyond the complaint to determine the merits of the punitive 
damages claim and the amount of punitive damages, if any, to be 
awarded."57 
 
The 
supreme 
court 
explained 
that 
"[w]ithout 
conducting an inquiry beyond the complaint, a circuit court 
cannot determine whether a defendant's conduct justifies a 
punitive damages award and, if an award is justified, what 
amount would accomplish the purposes of punitive damages while 
satisfying the requirements of due process."58  The Apex 
Electronics court concluded that the circuit court had erred 
when it relied solely on the plaintiff's demand in the complaint 
for a certain sum in punitive damages and "when it failed to 
receive proof of facts necessary to determine the merits of the 
                                                 
57 Apex Electronics, 217 Wis. 2d at 390. 
58 Id. 
No. 
2006AP813   
 
36 
 
punitive damages claim and the amount of punitive damages, if 
any, to be awarded."59     
¶65 Apex Electronics controls the present case.  Whether 
the circuit court awards or refuses to award punitive damages in 
a judgment by default, the circuit court must ordinarily make 
inquiry beyond the complaint to determine the merits of the 
punitive damages claim and the amount of punitive damages, if 
any, to be awarded.  We thus conclude, as the court did in Apex 
Electronics, that a circuit court in ruling on a claim for 
punitive damages errs in basing its decision solely on the 
allegations in the plaintiff's complaint.  The circuit court 
must give the complaining party an opportunity to prove facts in 
support of the punitive damages claim beyond those alleged in 
the complaint.60 
B 
¶66 We now turn to the record to determine whether the 
circuit court in the present case limited its consideration of 
the issue of punitive damages to the allegations of the 
complaint.  We acknowledge at the outset that the record, which 
consists in relevant part of lengthy transcripts of two separate 
hearings conducted by the circuit court, is somewhat difficult 
to interpret.  However, after examining the record as a whole, 
                                                 
59 Id. at 391. 
60 As we explained previously, the circuit court determines 
the method for receiving proof in determining damages in a 
default judgment. 
No. 
2006AP813   
 
37 
 
we conclude, as did the court of appeals, that the circuit court 
considered only the allegations of the complaint. 
¶67 At the hearing on the defendant's motion for a jury 
trial on the issue of damages, the plaintiff requested an 
opportunity to present witnesses to testify about facts that 
were not alleged in the plaintiff's complaint but that supported 
the plaintiff's punitive damages claim.  The plaintiff stated to 
the court that he wanted "the opportunity to come in with 
witnesses" not only to "establish the amount of money that was 
stolen from [the plaintiff]" but also to establish "the 
circumstances of those thefts."  The plaintiff explained that 
his 
purpose 
in 
presenting 
witness 
testimony 
about 
the 
circumstances 
of 
the 
thefts 
was 
to 
"show 
the 
egregious . . . manner in which [the defendant] conducted itself 
so 
that 
[the 
plaintiff 
could] 
legitimately 
prepare 
a 
record . . . that will justify punitive damages against [the 
defendant]."  The plaintiff acknowledged that it would be 
difficult for him to make the case for punitive damages based 
solely on the "bare bones" allegations in his complaint.   
¶68 The circuit court ruled that the plaintiff could 
introduce witness testimony regarding the amount that was stolen 
from the plaintiff but that the plaintiff could not introduce 
witness testimony about the defendant's conduct in relation to 
the plaintiff's request for punitive damages.  The circuit court 
held that although the plaintiff had a right to argue for 
punitive damages at the evidentiary hearing, the plaintiff would 
have to make such argument "from the admitted facts in the 
No. 
2006AP813   
 
38 
 
complaint."  In discussing the plaintiff's right to argue for 
punitive damages, the circuit court stated at various points 
that the plaintiff was "limited to the facts in the complaint"; 
that the plaintiff had "the right to argue based on what it is 
that [he had] pled"; that the circuit court need not "get into 
the business of hearing testimony at all concerning all of these 
other matters"; that the circuit court did not "intend to get 
into the question of all of the activity that went on here"; and 
that the circuit court would consider "based on the admitted 
facts, now admitted facts in the complaint, whether [the 
plaintiff was] entitled to punitive damages or not."   
¶69 The circuit court limited the plaintiff to the 
allegations of the complaint as follows:  
I'm only going to allow the plaintiff to prove the 
number of dollars involved and, of course, you can 
argue from the admitted facts in the complaint.  The 
complaint is deemed admitted in all of its aspects.  
It is deemed admitted.  And you can argue for punitive 
damages based on that, of course.  But I'm not going 
to get into a trial on the merits here.  I believe the 
allegations of the complaint are deemed admitted for 
purposes of this proceeding.  And that's what you're 
going to be stuck with.61   
¶70 An exchange between the circuit court and counsel for 
defendant also makes clear the circuit court's intention to 
decide the issue of punitive damages solely on the facts alleged 
in the plaintiff's complaint.  After the circuit court informed 
the defendant's counsel that it would decide the punitive 
                                                 
61 Emphasis added. 
No. 
2006AP813   
 
39 
 
damages issue on "[t]he facts that are in [the plaintiff's] 
complaint," the following exchange then ensued: 
[DEFENDANT'S COUNSEL]: All of them? 
THE COURT: All of them. 
[DEFENDANT'S COUNSEL]: Nothing else?  
THE COURT: Nothing else.  Well, the theory on defaults 
is that you are limited to what's in your complaint 
because in a typical default situation where someone 
doesn't answer, the theory is that if they knew you 
were going to ask for something else, they might have 
answered. . . . They are limited to the facts in the 
complaint. . . .    
¶71 After the hearing on the defendant's motion for a jury 
trial on damages, the plaintiff attempted to submit documentary 
evidence in support of the plaintiff's punitive damages claim.  
The documentary evidence was attached to an affidavit, signed by 
the 
plaintiff's 
counsel, 
describing 
the 
evidence. 
 
A 
supplemental brief also accompanied the evidence and the 
affidavit. 
 
In 
the 
supplemental 
brief, 
the 
plaintiff 
acknowledged that the circuit court had ruled at the motion 
hearing that the plaintiff "may not present witnesses to testify 
regarding the facts which Plaintiff believes support an award of 
punitive damages."  The plaintiff described the documentary 
evidence accompanying the brief as evidence pertaining to facts 
already known to the circuit court through the depositions. 
¶72 At the evidentiary hearing on damages, the plaintiff 
argued for punitive damages, relying upon the documentary 
evidence that the plaintiff had submitted to the circuit court 
in response to the circuit court's ruling that the plaintiff 
No. 
2006AP813   
 
40 
 
could not introduce witnesses to testify about facts supporting 
his punitive damages claim.  The circuit court excluded this 
documentary evidence on hearsay grounds. 
¶73 Immediately after the circuit court ruled that the 
plaintiff's 
documentary 
evidence 
would 
be 
excluded, 
the 
plaintiff again requested to present a witness, Ted Frydrych, to 
testify in support of the plaintiff's punitive damages claim.  
Mr. Frydrych is another of the defendant's accountholders whose 
assets allegedly were stolen by the same employee who allegedly 
stole from the plaintiff.  Counsel for the plaintiff stated that 
it was her "offer of proof that we can establish all the facts 
set forth in my affidavit as well as the affidavit of Frydrych 
through his live testimony."62  In response, the circuit court 
stated, "All right, that affidavit will stand as your offer of 
proof."  
¶74 The circuit court did not state whether it accepted 
counsel's offer of proof or whether it would consider the offer 
of proof when deciding the issue of punitive damages.  When it 
decided punitive damages at the close of the evidentiary 
hearing, the circuit court made no reference to the offer of 
proof, to counsel's affidavit, to the affidavit of Mr. Frydrych, 
or 
to 
counsel's 
request 
to 
present 
Mr. 
Frydrych's 
live 
testimony.  Mr. Frydrych never testified at the evidentiary 
                                                 
62 Mr. Frydrych's affidavit was among the documentary 
evidence that the plaintiff submitted to the court after the 
hearing on the defendant's motion for a jury trial on the issue 
of damages and that the court ultimately excluded as evidence. 
No. 
2006AP813   
 
41 
 
hearing on damages.  The circuit court decided punitive damages 
without making any clear reference to facts or evidence beyond 
the plaintiff's complaint. 
¶75 At the close of the evidentiary hearing on damages, 
the circuit court held that judgment by default would be 
rendered against the defendant in the amount of $514.010 plus 
costs and interest, for a total judgment of $525,901.41.  The 
circuit court also denied the plaintiff's request for punitive 
damages.  The circuit court reasoned that "none of the 
money . . . that was taken from the plaintiff went into the 
pocket of [the defendant] other than its employee."  The circuit 
court stated: "I do not believe that if the district attorney 
were to prosecute [the defendant] for theft, that such a 
prosecution would be successful because I don't think they can 
prove intent."  The circuit court stated in conclusion that the 
defendant "behaved very badly" but that the court did "not 
believe that punitive damages against [the defendant] in this 
case would be appropriate."  
¶76 The 
defendant 
contends 
that 
the 
circuit 
court 
considered the merits of the plaintiff's claim for punitive 
damages.  It points to the circuit court's observations during 
the hearing on the defendant's motion for a jury trial on the 
issue of damages that some of the facts and evidence discussed 
by the plaintiff "sounds like negligent practice" and that the 
plaintiff seemed to have "a pretty high burden" of showing that 
the defendant was not "just sloppy" but instead acted in 
intentional disregard of the plaintiff's rights.  According to 
No. 
2006AP813   
 
42 
 
the defendant, these statements of the circuit court show that 
the circuit court considered facts beyond those alleged in the 
complaint and concluded that the plaintiff was unable to prove 
his claim for punitive damages.   
¶77 We disagree with the defendant.  The circuit court's 
passing observations about the plaintiff's claim for punitive 
damages do not detract from the clarity of the circuit court's 
numerous comments that the circuit court was limiting the 
plaintiff to arguing from the facts alleged in his complaint.  
In any event, the circuit court's comments do not demonstrate a 
careful consideration of the record and an analysis of the law 
of punitive damages to which the parties were entitled.  
¶78 Taken as a whole, the record supports the plaintiff's 
assertions that the circuit court decided the issue of punitive 
damages solely on the basis of allegations in the plaintiff's 
complaint.   
C 
¶79 Finally, we determine whether the circuit court erred 
in denying the plaintiff's claim for punitive damages.  The 
circuit court erred in limiting its decision to the allegations 
of the complaint, in failing to review the entire record, and in 
failing to give the plaintiff an opportunity to present evidence 
to support his claim for punitive damages.  Under these 
circumstances, the merits of the plaintiff's claim for punitive 
damages are not before this court, and we do not address them.  
We remand the matter to the circuit court to allow the circuit 
court an opportunity to exercise its discretion in determining 
No. 
2006AP813   
 
43 
 
the nature of the hearing and to determine whether punitive 
damages are warranted.    
¶80 For the reasons set forth, we conclude that the 
circuit court erred in deciding the plaintiff's punitive damages 
claim solely on the basis of allegations in the complaint and in 
denying the plaintiff an opportunity to prove additional facts 
in support of the punitive damages claim.     
* * * * 
¶81 In sum, we affirm the decision of the court of 
appeals.  We affirm, as did the court of appeals, the circuit 
court's denial of the defendant's request for a jury trial on 
the issue of damages.  The circuit court did not violate the 
defendant's right of trial by jury under Article I, Section 5 of 
the Wisconsin Constitution when it denied the defendant's motion 
for a jury trial on the issue of damages.  The defendant waived 
its right of trial by jury in the manner set forth in Wis. Stat. 
§§ (Rule) 804.12(2) and 806.02.  We reverse, as did the court of 
appeals, the circuit court's ruling denying punitive damages.  
We conclude that the circuit court erred in deciding the 
plaintiff's punitive damages claim solely on the basis of facts 
alleged in the complaint and in denying the plaintiff an 
opportunity to prove additional facts in support of the punitive 
damages claim.  We remand the issue of punitive damages to the 
circuit court to exercise its discretion in determining the 
nature of the hearing on punitive damages and to determine 
whether punitive damages are warranted. 
No. 
2006AP813   
 
44 
 
¶82 Accordingly, we affirm the decision of the court of 
appeals affirming in part and reversing in part the judgment and 
order of the circuit court.   
By the Court.—The decision of the court of appeals is 
affirmed, and the cause is remanded to the circuit court for 
further proceedings consistent with this opinion.63   
 
                                                 
63 The court of appeals remanded the cause for consideration 
of other issues not involved in this review.     
No.  2006AP813.akz 
 
1 
 
¶83 ANNETTE 
KINGSLAND 
ZIEGLER, 
J.   (concurring). 
 
I 
concur, but write separately on the issue of punitive damages 
because I do not conclude that the circuit court decided the 
plaintiff's punitive damages claim solely on the basis of the 
facts alleged in the complaint.  In this case, what the circuit 
court judge relies upon in making his ruling is not clear.  It 
is not clear from the record whether the judge considered the 
offer of proof and determined as a matter of law that the 
plaintiff could not meet the level of conduct necessary for 
punitive damages to be awarded or whether the circuit court 
decided the issue based upon the evidence presented, i.e., the 
pleadings and WMAS's conduct.   
¶84 On one hand, the record is not absolutely clear that 
the judge precluded the plaintiff from introducing testimony at 
trial on punitive damages because parts of the record indicate 
that the plaintiff was to introduce evidence at the two-day 
hearing, other than facts established by the complaint, on all 
damages including punitive damages.  
¶85 On February 20, 2006, the circuit court conducted a 
motion hearing.  At that hearing, the transcript reflects the 
following:  
THE COURT: . . . It seems to me what we are here 
to do is to have the plaintiff prove what the damages 
are.  That seems to me that's all we are looking at.  
And, obviously, you have the right to argue based on 
what it is that you've pled.  You have the right to 
argue that those damages should include punitive 
damages.  But I think we are only here for a hearing 
on the question of dollars.  How many dollars.  So I 
don't intend to get into the question of all of the 
activity that went on here. 
No.  2006AP813.akz 
 
2 
 
I'm going to assume that the facts that are 
alleged in the complaint are true.  I'm going to 
assume that, and therefore, plaintiff is entitled to 
judgment.  The only question is what amount.  How many 
dollars?  And I'm going to give the plaintiff a chance 
to prove that. 
[PLAINTIFF'S COUNSEL:]  Your honor, just for my 
clarification, we did plead in the amended complaint, 
we did ask for punitive damages.   
THE COURT:  All right.  I'm going to hear you on 
that.   
[PLAINTIFF'S COUNSEL:]  Okay.  
¶86 The circuit court then discussed the fact that the 
plaintiff would not need to introduce evidence regarding the 
facts that are already admitted by default and that the 
defendant would be precluded from arguing that the damages 
should be mitigated.  When the answer was stricken, so was the 
defense of mitigation of damages.  While the circuit court 
precluded the parties from retrying the merits of the complaint 
for liability purposes, the circuit court did allow the parties 
to introduce evidence regarding damages.  The February 20 record 
further reflects the following: 
THE COURT: . . . The only issue is how many 
dollars flow from those facts, how many dollars of 
damages?  And based on the admitted facts, now 
admitted facts in the complaint, whether they are 
entitled to punitive damages or not. 
. . . . 
[PLAINTIFF'S COUNSEL:]  But my understanding of 
the law is whether or not someone is entitled to 
punitives depends on the circumstances on which the 
tort was committed.  So although the Court is 
establishing as given that the tort was committed, we, 
if I understand you correctly, will be entitled to 
present evidence on the circumstances on which the 
No.  2006AP813.akz 
 
3 
 
tort was committed to allow us to prove our punitive 
damages claim.  
After further discussion the circuit court stated: 
THE COURT: . . . This is a hearing on damages in 
a default situation.  I'm only going to allow the 
plaintiff to prove the number of dollars involved and, 
of course, you can argue from the admitted facts in 
the complaint.  The complaint is deemed admitted in 
all of its aspects.  It is deemed admitted.  And you 
can argue for punitive damages based on that, of 
course. . . .  
¶87 Accordingly, from this part of the record it appears 
that the plaintiff would have his day in court to prove punitive 
damages, but the plaintiff was instructed to not be duplicitous 
regarding facts already proven because of the default. 
¶88 On the other hand, at the two-day trial, it is 
apparent that plaintiff's counsel believed that the plaintiff 
was precluded, by court order, from introducing witnesses 
regarding punitive damages, and the record reflects that the 
circuit court judge did not allow such testimony.  At that 
trial, the plaintiff called two witnesses: George Kiskunas 
testified on accounting matters, and Dr. Rao testified on his 
own behalf.  Plaintiff's counsel attempted to introduce an offer 
of proof and also asked to present live testimony.  When 
discussing evidence being introduced, in the form of documents 
rather than live witnesses, the following transpired:  
[PLAINTIFF'S COUNSEL:]  . . . It was intended to 
be responsive to the Court's ruling that certain forms 
of evidence would not be presented at the hearing.  
And if I understand the Court's ruling correctly, it 
was not so much that punitive damages were an 
impossibility here.  I mean, we looked at the language 
in the complaint, and I think the Court's review of 
that revealed that, yeah, we're talking about some 
intentional torts here.  But what the Court did not 
No.  2006AP813.akz 
 
4 
 
want to do is have us do a hearing on those 
allegations.  I completely respect that, and I want to 
be able to provide the information that I feel is 
essential to support a punitive for exemplary damages 
ruling but obviously do not want to violate the 
Court's order. 
 . . . . 
And, Your Honor, in the attachments here, I've 
got a couple of affidavits.  The affidavit I signed 
takes, again, documents that we obtained from WMA[S] 
in discovery that I believe support our request for 
punitive damages.  And I did not take stuff that 
simply establishes the allegations in the pleadings, 
but 
stuff 
that 
aggravates 
the 
conduct 
that 
is 
conclusively established in the pleadings to a point 
where I think it will show that punitive or exemplary 
damages are appropriate.  Stuff that we took out, 
segments of deposition where Mr. Novak talks about the 
environment at WMA[S] where fraud is tolerated.  We 
took stuff from Mr. Ted Frydrych that shows that his 
affidavits of forgery that show an identical course of 
conduct with the $10,000 thefts for the year preceding 
the thefts from David Novak.  And we took e-mails sent 
by Mr. Frydrych and Jacque Black to WMA[S] asking 
about the status of the investigation into the thefts 
for Mr. Frydrych's account, and we submitted responses 
by WMA[S] which is essentially, you know, talk to this 
person, talk to that person, talk to this person.  
With increasing desperation Mr. Frydrych inquired into 
the status of the funds and meeting a brick wall.  
Finally, we submitted notes from Matt Lucky, the 
compliance manager, his journal entry saying that, 
after a conversation with the SCC, the SCC's primary 
concern regarding Mr. Frydrych and the situation with 
WMAS was that WMAS take care of Mr. Frydrych. 
 
Mr. Frydrych's affidavit is further attached 
indicating that he never received any money to 
compensate him for the loses he suffered as a result 
of Mr. Novak's thefts while he was affiliated with 
WMAS.  Those are all facts.  We had Mr. Frydrych 
prepared to come and testify about that stuff.  It's 
my understanding the Court didn't want to hear it.  We 
prepared it in affidavit form.  I'd ask the Court to 
accept the affidavits as evidence that would establish 
our right to punitive and/or exemplary damages.   
No.  2006AP813.akz 
 
5 
 
¶89 In response, the circuit court, at the February 27 
hearing, stated:  
THE COURT:  Well, I think you've made a record.  
It's obvious that I'm not sure at what point WMA[S] 
decided to batten down the hatches, but it's pretty 
obvious that they haven't treated Mr. Rao very well.  
Whether that gives rise to punitive damages or not is 
something I'll hear your argument about at the 
conclusion.  But it's perfectly obvious here that, 
just from my experience with this case, that poor Mr. 
Lanphier here was repeatedly having to come back to 
court and hold his hat in his hand because WMAS [] 
didn't do what they were supposed to do, and that 
happened repeatedly. 
 
And when there was an investigation or when 
counsel for Dr. Rao made an inquiry, they immediately 
turned 
everything 
over 
to 
lawyers 
and 
started 
screaming 
attorney/client 
privilege, 
and 
they 
absolutely refused to do anything until this Court had 
to grab them by the scruff of the neck and forced them 
to do that.  I think all of that goes to the question 
of whether there are punitive damages, but whether 
they are entitled to punitive damages is something I 
will hear your argument at the end of the case.  There 
certainly is some evidence in the record, that's for 
sure. 
Counsel for the defense then sought to clarify what evidence was 
in the record and stated: 
[DEFENDANT'S COUNSEL:] . . . I previously moved to 
strike everything except the deposition testimony 
attached to their supplement to hearing brief, and I 
believe all of those documents fall in the same 
category as we just did Exhibit 10.  They are all 
hearsay.  There's no foundation for any of these 
documents.  I don't have a right to cross-examine Mr. 
Frydrych, Mr. Novak, the other people who generated 
these documents attached to the hearing brief.  If 
they are making an offer of proof, I understand that, 
but if I think she's asking for these documents to be 
admitted into evidence, and they should not be. 
THE COURT:  I think she is and I'm not going to.  
No.  2006AP813.akz 
 
6 
 
[DEFENDANT'S COUNSEL:]  Thank you. 
[PLAINTIFF'S COUNSEL:]  Your Honor, just to 
clarify.  These are documents.  We've got the binders 
here.  I can show you that these are documents that 
were produced in discovery by WMAS.  These are WMAS's 
records.  We're not surprising them.  We're just 
trying to use the information that –- and Lord knows 
we've worked hard enough to get it.  We're just trying 
to use the limited tools that we've gathered in this 
investigation –- it feels like an investigation to me 
-- in this litigation against them, because otherwise 
what do we have?  We can bring in Dr. Rao and he can 
say they were horrible to me, but in punitive damages, 
it talks about the need to punish and deter.  We can 
talk about how horrible they've been for many other 
people.  We've fought tooth and nail for that stuff, 
and this Court -- it is relevant because it is 
relevant to show a pattern of conduct, to show intent, 
right now most crucially to us to show the need for 
punitive damages. 
THE COURT:  I think I can make some conclusions 
about intent just based on how WMAS has conducted 
itself during this litigation.  I really don't think 
it's something I need, and I do think Counsel is 
right.  You should have the right to cross-examine. 
[PLAINTIFF'S COUNSEL:]  Your Honor, can we bring 
Mr. Frydrych in?  Mr. Frydrych is more than willing to 
testify.  He hasn't had his day in court yet, and he 
won't until the criminal proceedings.  Your Honor, 
[co-counsel] is encouraging me to do the technical 
thing and make an offer of proof, but obviously, I 
signed this under oath and it's my offer of proof that 
we can establish all the facts set forth in my 
affidavit as well as the affidavit of Frydrych through 
his live testimony. 
The circuit court responded, "All right.  Well, that affidavit 
will stand as your offer of proof."  The defense then proceeded 
with calling its own witnesses.   
¶90 At the close of trial, when ultimately deciding the 
issue of punitive damages, the circuit court stated:  
No.  2006AP813.akz 
 
7 
 
THE COURT:  I find further –- well, addressing 
myself to the question of punitive damages.  I believe 
that Mr. Fitzpatrick is correct that Section 895.80 
has to be construed strictly.  I don't –- it's 
apparent that none of the money that went from the –- 
that was taken from the plaintiff went into the pocket 
of WMAS other than its employee, David Novak.  I do 
not believe that if the district attorney were to 
prosecute WMAS for theft, that such a prosecution 
would be successful because I don't think they can 
prove intent.  And I do not believe that punitive 
damages 
against 
WMAS 
in 
this 
case 
would 
be 
appropriate. 
 
Now, I realize that WMAS has acted in a manner 
which was very clearly designed to obstruct and to 
impede any recovery by the plaintiff and to do 
virtually anything it could to cover up the wrongs 
that had been committed.  And certainly in the course 
of this litigation, they have behaved very badly.  But 
I don't think that I can from that conclude that the 
plaintiff is entitled to punitive damages.  
¶91 The 
majority 
concludes 
that 
the 
circuit 
court 
precluded the plaintiff from introducing witnesses to support 
his 
punitive 
damages 
claim 
and 
specifically 
limited 
the 
plaintiff to the facts alleged in the complaint.  Majority op., 
¶¶69-70, 73.  The majority characterizes the circuit court's 
action as if the circuit court decided that it could not——as a 
matter of law——look outside the complaint.  See majority op., 
¶¶66-67.  I concur because the record is unclear that the 
circuit court relied solely on the facts of the complaint.  It 
is unclear as to whether the circuit court judge relied on the 
testimony presented, the admitted allegations of the complaint, 
and WMAS's conduct during trial or whether, given the offer of 
proof, the circuit court determined that the conduct did not 
rise to the level of punitive damages as a matter of law. 
No.  2006AP813.akz 
 
8 
 
¶92 Clearly, a circuit court is not required to conduct a 
trial on punitive damages just because punitive damages are 
pled.  The statute calls for specific egregious behavior.  Wis. 
Stat. § 895.043.1  Circuit courts are vested with authority to 
determine whether a punitive damages claim survives to trial.  
That determination can occur in a variety of ways.  Here, we are 
not sure what the circuit court did in reaching its conclusion 
that punitive damages are not warranted.  
¶93 The majority states that a circuit court should 
exercise its discretion in determining the nature of the hearing 
on punitive damages and in determining whether punitive damages 
are warranted.  Majority op., ¶79.  I agree.  The circuit court 
should evaluate the claim for punitive damages and determine 
whether a trial is warranted.  Clearly, not all claims for 
punitive damages warrant a trial.  Here, we affirm the court of 
appeals' determination, "the court may hold an evidentiary 
hearing, consider Rao's offer of proof to determine if an 
evidentiary hearing is warranted, or allow Rao an opportunity to 
submit additional proof to support his case for punitive damages 
before determining whether to hold a full evidentiary hearing."  
Rao v. WMA Securities, Inc., No. 2006AP813, unpublished slip 
op., ¶42 (Wis. Ct. App. Mar. 29, 2007).  The circuit court may 
ultimately determine that a trial is appropriate, but it may 
                                                 
1 Wisconsin Stat. § 895.043(3), "Standard Of Conduct," 
provides that "[t]he plaintiff may receive punitive damages if 
evidence 
is 
submitted 
showing 
that 
the 
defendant 
acted 
maliciously toward the plaintiff or in an intentional disregard 
of the rights of the plaintiff." 
No.  2006AP813.akz 
 
9 
 
also determine that the matter can be disposed of short of 
trial.  The circuit court has full discretion to make that 
determination on remand. 
¶94 On one hand, the record indicates that the circuit 
court gave the plaintiff the opportunity to introduce evidence 
at trial and through an offer of proof, but the circuit court 
concluded that based on the evidence, the plaintiff was not 
entitled to punitive damages.  On the other hand, the record 
indicates that the plaintiff was precluded from offering 
testimony from witnesses who were relevant to the issue of 
punitive damages and that the circuit court reached its decision 
without hearing the relevant testimony.  Because the circuit 
court's decision does not assist us in determining what the 
circuit court considered in reaching its conclusion not to award 
punitive damages, this case must be remanded. 
¶95 However, the majority concludes that the circuit court 
"erred in deciding the plaintiff's punitive damages claim solely 
on the basis of allegations in the complaint and in denying the 
plaintiff an opportunity to prove additional facts in support of 
the punitive damages claim."  Majority op., ¶80.  The record is 
not so clear, and thus, I write separately.  Whether the circuit 
court relied solely on the complaint in making its ruling is 
subject to question.   
¶96 As a result, I concur with the majority that a record 
must be made regarding whether, and to what extent, punitive 
damages should be awarded.  I would afford the circuit court 
judge the flexibility of properly considering that issue as a 
No.  2006AP813.akz 
 
10 
 
matter of law or after a hearing.  I would afford the circuit 
court judge the full opportunity to decide how best to proceed. 
¶97 For the foregoing reasons I concur. 
No.  2006AP813.dtp 
 
1 
¶98 DAVID T. PROSSER, J.   (dissenting).  The majority 
holds that defendant WMA Securities, Inc. (WMAS) waived the 
right to jury trial on the issue of damages because of discovery 
violations leading to a court-imposed judgment by default.  
Majority op., ¶¶5, 81.  It asserts that judgment by default 
under Wis. Stat. § 804.12(2)(a)3. triggers the application of 
Wis. Stat. § 806.02, and that all procedures for determining 
damages under the latter statute are within the discretion of 
the circuit court, subject only to review for an erroneous 
exercise of discretion.  See majority op., ¶¶30, 38, 39-45.  
Because the majority's decision diminishes the constitutional 
right of jury trial in civil cases and is grounded in a mistaken 
theory of waiver, I respectfully dissent. 
I. INTRODUCTION 
¶99 The issue presented is whether WMAS has the right to a 
jury trial on the issue of damages after the circuit court 
entered a judgment by default as a sanction for WMAS's discovery 
violations.  WMAS has not challenged the judgment against it on 
the issue of liability, but it contends that the court may not 
deprive it of a jury determination as to damages.  This court 
granted WMAS's petition for review because it raised an 
important question of constitutional law. 
¶100 In Wisconsin, the right of jury trial in civil cases 
is provided by both the Wisconsin Constitution and the Wisconsin 
Statutes.  The Wisconsin Constitution, Article I, Section 5, 
declares that:  
The 
right 
of 
trial 
by 
jury 
shall 
remain 
inviolate, and shall extend to all cases at law 
without regard to the amount in controversy; but a 
No.  2006AP813.dtp 
 
2 
jury trial may be waived by the parties in all cases 
in the manner prescribed by law. Provided, however, 
that the legislature may, from time to time, by 
statute provide that a valid verdict, in civil cases, 
may be based on the votes of a specified number of the 
jury, not less than five-sixths thereof. 
Wisconsin Stat. § 805.01 reaffirms the right to jury trial, but 
requires that it be claimed:   
(1) Right preserved.  The right of trial by jury 
as 
declared 
in 
article 
I, 
section 
5, 
of 
the 
constitution or as given by a statute and the right of 
trial by the court shall be preserved to the parties 
inviolate.   
(2) Demand.  Any party entitled to a trial by 
jury or by the court may demand a trial in the mode to 
which entitled at or before the scheduling conference 
or pretrial conference, whichever is held first.  The 
demand may be made either in writing or orally on the 
record. 
¶101 The right of jury trial in a civil case can be waived.  
Wisconsin Stat. § 805.01(3) implements the waiver language in 
the constitution by setting out "in the manner prescribed by 
law" the circumstances constituting waiver.  Wis. Const. art. I, 
§ 5.  Wisconsin Stat. § 805.01(3) states:   
(3) Waiver.  The failure of a party to demand in 
accordance with sub. (2) a trial in the mode to which 
entitled constitutes a waiver of trial in such mode.  
The right to trial by jury is also waived if the 
parties or their attorneys of record, by written 
stipulation filed with the court or by an oral 
stipulation made in open court and entered in the 
record, consent to trial by the court sitting without 
a jury. A demand for trial by jury made as herein 
provided may not be withdrawn without the consent of 
the parties. 
¶102 Subsection (3) uses the term "waiver" in two different 
senses.  First, technically, "waiver" is the intentional 
relinquishment or abandonment of a known right.  See United 
States v. Olano, 507 U.S. 725, 733 (1993); Johnson v. Zerbst, 
No.  2006AP813.dtp 
 
3 
304 U.S. 458, 464 (1938).  A written stipulation filed with the 
court or an oral stipulation made in open court, consenting to 
trial by the court, constitute waivers in the traditional and 
technical sense of the term.  By contrast, a party's failure to 
demand a jury trial is, strictly speaking, a "forfeiture,"——that 
is, a failure to timely assert a right.  Olano, 507 U.S. at 733; 
see also Freytag v. Comm'r, 501 U.S. 868, 894-95 n.2 (1991) 
(Scalia, J., concurring) (distinguishing between waiver and 
forfeiture); 
State 
v. 
Kelty, 
2006 
WI 
101, 
¶¶62-63, 
294 
Wis. 2d 62, 
716 
N.W.2d 886 
(Abrahamson, 
C.J., 
concurring) 
(cautioning 
against 
using 
"waiver" 
and 
"forfeiture" 
interchangeably). 
¶103 A slight variation on the kind of "waiver" described 
in Wis. Stat. § 805.01(3) is found in Wis. Stat. § 814.61(4), 
which provides that if a party fails to pay the jury fee within 
the time permitted to demand a jury trial, "no jury may be 
called in the action, and the action may be tried to the court 
without a jury."  See State ex rel. Prentice v. County Ct. of 
Milwaukee County, 70 Wis. 2d 230, 239, 234 N.W.2d 283 (1975).  
This subsection creates a uniform rule supplementing the 
requirements for any party to demand a jury trial.  It provides, 
in essence, that a demand for trial by jury in a civil case is 
not perfected or not complete if the jury fee is not paid. 
¶104 These forms of "waiver" are not the only ways that a 
party can surrender the constitutional right of jury trial.  
Looking to the default judgment statute, a civil defendant gives 
up the right to a trial of any sort "if no issue of law or fact 
has been joined and if the time for joining issue has expired," 
No.  2006AP813.dtp 
 
4 
Wis. Stat. § 806.02(1), or if "a defendant fails to appear in an 
action," Wis. Stat. § 806.02(3), or if a defendant who has 
appeared in an action "fails to appear at trial."  Wis. Stat. 
§ 806.02(5).  These defaulting actions by a party may be 
characterized as either forfeiture or waiver, depending upon the 
party's state of mind. 
¶105 In short, a party can surrender the right of civil 
jury trial by intentionally relinquishing the right or by 
failing to assert the right, both coming under the generic 
heading of "waiver." 
¶106 When a circuit court takes away a party's right of 
jury trial, however, the court's action must be explained and 
defended on other grounds. 
¶107 For instance, this court has determined that a circuit 
court 
may 
enter 
summary 
judgment 
against 
a 
party, 
notwithstanding the party's persistent demand for a jury trial, 
"if the pleadings, depositions, answers to interrogatories, and 
admissions on file, together with the affidavits, if any, show 
that there is no genuine issue as to any material fact and that 
the moving party is entitled to a judgment as a matter of law."  
Wis. Stat. § 802.08(2); see Eden v. La Crosse Lutheran Hosp., 53 
Wis. 2d 186, 192, 191 N.W.2d 715 (1971). 
¶108 A summary judgment that deprives a party of a jury 
trial is clearly not grounded in principles of waiver or 
forfeiture.  Summary judgment is grounded on the unrelated 
principle that a jury is unnecessary——in certain cases——if there 
are no genuine issues of material fact and only legal issues 
will decide the outcome.  In these circumstances, this court's 
No.  2006AP813.dtp 
 
5 
rules of civil procedure authorize circuit judges to deny a 
party the right of jury trial.1 
¶109 The majority's holding in the present case provides 
additional authority for circuit judges to take away a party's 
right of jury trial.  The majority relies on Wis. Stat. 
§ 804.12(2)(a)3., 
which 
permits 
circuit 
courts 
to 
render 
judgment 
by 
default 
as 
a 
discovery 
sanction 
against 
a 
disobedient party.  Majority op., ¶¶5, 81.  This authority must 
be grounded in some principle other than waiver or forfeiture or 
the absence of disputed facts, for these principles are 
inapplicable.  A circuit court's decision to impose a sanction 
that deprives a party of a constitutional right ought to require 
standards that are susceptible to meaningful review.  The 
proposition that a party deprived of a constitutional right by 
sanction 
has 
intentionally 
relinquished 
that 
right 
is 
intellectually bankrupt because it eliminates the need for 
standards governing the judicially imposed deprivation.  If a 
circuit court were to use Wis. Stat. § 804.12(2)(a) to impose 
significant costs on a defendant (for instance, all the 
plaintiff's attorney fees) instead of rendering a judgment by 
default, I hope this court would not try to explain the sanction 
in terms of "waiver." 
                                                 
1 My reservations about the use of summary judgment to 
deprive a party of trial by jury may be found in: Trinity 
Evangelical Lutheran Church and School-Freistadt v. Tower Ins. 
Co., 2003 WI 46, ¶¶71-86, 261 Wis. 2d 333, 661 N.W.2d 789 
(Prosser, J., dissenting); Steven V. v. Kelley H., 2004 WI 47, 
¶¶63-100, 
271 
Wis. 
2d 1, 678 N.W.2d 856 (Prosser, J., 
dissenting); and Walworth County DHSS v. Andrea L.O., 2008 WI 
46, ¶¶59-68, ___ Wis. 2d ___, 749 N.W.2d 168 (Prosser, J., 
concurring). 
No.  2006AP813.dtp 
 
6 
¶110 When this court endorses a rule permitting judges to 
take away a party's constitutional right of jury trial, it must 
enunciate a clear and compelling rationale for that rule, plus 
standards for its application, so that the rule is not easily 
employed or terribly abused.  This the majority opinion fails to 
do. 
¶111 The 
majority 
opinion 
obfuscates 
Wis. 
Stat. 
§ 805.01(3), the jury trial waiver statute.  The reason for this 
obfuscation is obvious.  Any traditional view of either waiver 
or forfeiture is inconsistent with the facts of this case.  
Section 805.01(3) does not provide for waiver here because WMAS 
has not (1) failed to timely demand a jury trial; or (2) 
stipulated to trial without a jury.   
II. THE MAJORITY OPINION 
¶112 Because the future of an important constitutional 
right is at stake, the majority opinion must be carefully 
scrutinized.  The majority asserts that WMAS "waived its right 
of trial by jury in the manner set forth in Wis. Stat. §§ (Rule) 
804.12(2) and 806.02."  Majority op., ¶¶5, 81.   
¶113 The majority explains that a party may waive a trial 
by jury on the issue of damages "in the manner prescribed by 
law."  Majority op., ¶17.  Thus, the question, in the majority's 
view, is whether the defendant waived its right of trial by jury 
in the manner prescribed by law, that is, "whether by failing to 
comply with the circuit court's discovery orders and by 
incurring a judgment by default as a sanction, the defendant has 
waived its state constitutional right of trial by jury in the 
manner prescribed by law."  Id., ¶30.   
No.  2006AP813.dtp 
 
7 
¶114 There is no dispute that Wis. Stat. § 805.03 reads in 
part:   
For failure of any . . . party to comply with the 
statutes governing procedure in civil actions or to 
obey any order of court, the court . . . may make such 
orders in regard to the failure as are just, including 
but 
not 
limited 
to 
orders 
authorized 
under 
s. 
804.12(2)(a). 
Wisconsin Stat. § 804.12(2)(a) reads in part:   
(2) Failure to comply with order.  (a) If a 
party . . . fails to obey an order to provide or 
permit discovery . . . the court in which the action 
is pending may make such orders in regard to the 
failure as are just, and among others the following: 
 
. . . .    
3. 
An order striking out pleadings or parts 
thereof, or staying further proceedings until the 
order 
is 
obeyed, 
or 
dismissing 
the 
action 
or 
proceeding or any part thereof, or rendering a 
judgment by default against the disobedient party. 
¶115 The majority cites cases in which circuit courts have 
rendered a judgment by default against a disobedient party as a 
discovery sanction under Wis. Stat. § 804.12(2)(a).  Majority 
op., ¶41 n.31; see Midwest Developers v. Goma Corp., 121 
Wis. 2d 632, 634, 642-43, 649, 360 N.W.2d 554 (Ct. App. 1984); 
Kerans v. Manion Outdoors Co., Inc., 167 Wis. 2d 122, 130, 482 
N.W.2d 110 (Ct. App. 1992); Smith v. Golde, 224 Wis. 2d 518, 
525, 528, 592 N.W.2d 287 (Ct. App. 1999); see also Hudson 
Diesel, Inc. v. Kenall, 194 Wis. 2d 531, 535 N.W.2d 65 (Ct. App. 
1995). 
¶116 In several of these cases, the court of appeals moved 
immediately, without analysis, to apply Wis. Stat. § 806.02——the 
default judgment statute——as though it were axiomatic that 
No.  2006AP813.dtp 
 
8 
"judgment by default" under Wis. Stat. § 804.12(2)(a)3. is the 
same as "default judgment" under Wis. Stat. § 806.02.  The 
majority eagerly repeats this procedure.  The majority simply 
states: 
"Wisconsin 
Stat. 
§ (Rule) 
806.02 
governs 
default 
judgments."  Majority op., ¶32. 
¶117 The 
majority 
ultimately 
concludes: 
"[T]he 
clear 
implication of the rule and the case law applying the rule is 
that by engaging in conduct that results in a default judgment 
the defendant has waived its right of trial by jury in the 
manner prescribed by Wis. Stat. § (Rule) 806.02."  Majority op., 
¶39 (emphasis added). 
¶118 There 
are 
several 
problems 
with 
the 
majority's 
analysis. 
A 
¶119 The first problem with the majority's analysis is that 
it fails to acknowledge that the seminal case applying Wis. 
Stat. § 804.12(2)(a) to effect judgment by default does not 
utilize the doctrine of waiver.  The Midwest Developers case 
relies on a completely different principle.  It looked to Hauer 
v. Christon, 43 Wis. 2d 147, 168 N.W.2d 81 (1969), which 
explained that a trial court's inherent power to strike a 
defendant's pleading is grounded "upon the necessity of the 
court to maintain the orderly administration of justice and the 
dispatch of its business."  Midwest Developers, 121 Wis. 2d at 
643 (quoting Hauer, 43 Wis. 2d at 150-51). 
¶120 The Midwest Developers court went on to explain that 
the circuit court's decision to render judgment by default was 
"discretionary" and that a court abuses its discretion if it 
No.  2006AP813.dtp 
 
9 
misapplies or misinterprets the law.  Midwest Developers, 121 
Wis. 2d at 650.   
¶121 In the Kerans case, the court stated:   
The decision is discretionary with the trial court.  
We review for abuse of that discretion.  A court 
properly exercises its discretion if it examines 
relevant facts, applies a proper standard of law and, 
using a demonstrated rational process, reaches a 
conclusion that a reasonable judge could reach. 
Kerans, 167 Wis. 2d at 130 (citations omitted). 
¶122 In Smith v. Golde the court restated the standard of 
review: "We review a trial court's decision to enter a default 
judgment under the erroneous exercise of discretion standard."  
224 Wis. 2d at 525 (citation omitted).  Then, it reasoned that 
to enter a judgment by default as a sanction, "the trial court 
must determine that the 'noncomplying party's conduct is 
egregious or in bad faith and without a clear and justifiable 
excuse.'"  Smith, 224 Wis. 2d at 526 (quoting Hudson Diesel, 194 
Wis. 2d at 542). 
¶123 These statements about judicial discretion to maintain 
the orderly administration of justice embody a starkly different 
rationale from the majority's theory of defendant "waiver."  A 
court's discretionary decision to deny the right of jury trial 
as a sanction is substantially different from a defendant's 
intentional relinquishment of that right or failure to assert 
that right.  The first situation focuses on decision-making by 
the court while the second situation focuses on decision-making 
by the defendant. 
¶124 The majority's theory of waiver departs from black 
letter Wisconsin law.  For instance, in Milas v. Labor 
No.  2006AP813.dtp 
 
10 
Association of Wisconsin, Inc., 214 Wis. 2d 1, 571 N.W.2d 656 
(1997), the court stated:   
This court has defined waiver as the "voluntary 
and intentional relinquishment of a known right" and 
has stated that "intent to relinquish [the right] is 
an essential element of waiver."  Von Uhl [v. 
Trempealeau County Mut. Ins. Co.,] 33 Wis. 2d [32,] 
37, 146 N.W.2d 516 [1966].  The waiver doctrine 
focuses on the intent of the party against whom waiver 
is asserted.  It is not necessary, however, to prove 
that the party had an actual intent to waive.  See 
Attoe v. State Farm Mut. Auto. Ins. Co., 36 Wis. 2d 
539, 545, 153 N.W.2d 575 (1967). "[T]he intent to 
waive may be inferred as a matter of law from the 
conduct of the parties."  Nelson v. Caddo-Texas Oil 
Lands Co., 176 Wis. 327, 329, 186 N.W. 155 (1922).   
Milas, 214 Wis. 2d at 9-10 (emphasis added) (footnote omitted) 
(brackets in original).   
¶125 The 
Milas 
court's definition and discussion are 
consistent with this court's prior explanations of the doctrine 
of waiver.2  The Milas court's definition is also consistent with 
                                                 
2 See, e.g., Gonzalez v. City of Franklin, 137 Wis. 2d 109, 
128-129, 403 N.W.2d 747 (1987) (defining waiver as a "voluntary 
and intentional relinquishment of a known right" and noting that 
"[i]ntent to waive is regarded as an essential element of 
waiver" (citations omitted)); Bank of Sun Prairie v. Opstein, 86 
Wis. 2d 669, 681, 273 N.W.2d 279 (1979) ("Waiver is defined as a 
voluntary and intentional relinquishment of a known right.  
Intent to waive is an essential element of waiver." (citations 
omitted)); Employers Ins. of Wausau v. Sheedy, 42 Wis. 2d 161, 
166, 166 N.W.2d 220 (1969) ("A waiver is the intentional 
relinquishment of a known right." (citation omitted)); Davies v. 
J.D. Wilson Co., 1 Wis. 2d 443, 466, 85 N.W.2d 459 (1957) 
("Waiver is defined as voluntary and intentional relinquishment 
of a known right."); Swedish Am. Nat'l Bank of Minneapolis v. 
Koebernick, 136 Wis. 473, 479, 117 N.W. 1020 (1908) ("A waiver 
is the intentional relinquishment of a known right." (citation 
omitted)); Monroe Water Works Co. v. City of Monroe, 110 Wis. 
11, 22, 85 N.W. 685 (1901) ("A waiver is the intentional 
relinquishment of a known right." (citation omitted)). 
No.  2006AP813.dtp 
 
11 
the common understanding of what the term "waiver" means, based 
on definitions found in legal dictionaries.3 
¶126 In Chevron Chemical Co. v. Deloitte & Touche, 176 Wis. 
2d 935, 501 N.W.2d 15 (1993) (Chevron I), the circuit court 
entered judgment for the plaintiff, notwithstanding a jury 
verdict for the defendant.  Id. at 944-45.  The court did so as 
a sanction for attorney misconduct.  Id. at 944.  The court 
explained:  
Sanctions for attorney misconduct both penalize 
the offender and deter future misconduct.  National 
Hockey League v. Met[ropolitan] Hockey Club[, Inc.], 
427 U.S. 639, 643 (1976); Johnson [v. Allis Chalmers 
Corp.], 162 Wis. 2d [261,] 282-83[, 470 N.W.2d 859 
(1991)].  The authority to impose sanctions is 
essential if circuit courts are to enforce their 
orders and ensure prompt disposition of lawsuits.   
Chevron I, 176 Wis. 2d at 946. 
¶127 Although the Chevron I case involved a sanction 
imposed after a jury trial, not a sanction for discovery 
violations, the court did not try to rationalize its sanction as 
some sort of "waiver" by the defendant. 
                                                 
3 Black's 
Law 
Dictionary 
defines 
"waiver" 
as 
"[t]he 
voluntary relinquishment or abandonment——express or implied——of 
a legal right or advantage."  Black's Law Dictionary 1574 (7th 
ed. 1999).   
Another 
legal 
dictionary 
defines 
"waiver" 
as 
"[t]he 
intentional 
relinquishment 
of 
a 
known 
right, 
claim, 
or 
privilege."  Ballentine's Law Dictionary 1356 (3d ed. 1969) 
(citing Phillips v. Lagaly, 214 F.2d 527 (10th Cir. 1954); Smith 
v. Smith, 51 N.W.2d 276 (Minn. 1952)).  Yet another legal 
dictionary defines "waiver" as "[t]he intentional relinquishment 
of a known right."  3 Bouvier's Law Dictionary and Concise 
Encyclopedia 3417 (8th ed. 1914) (citing Lehigh Valley R. Co. v. 
Providence Wash. Ins. Co., 172 Fed. 364 (2nd Cir. 1909)). 
No.  2006AP813.dtp 
 
12 
¶128 Here the majority adopts a waiver theory at odds with 
precedent so that judicial deprivation of the constitutional 
right of jury trial appears to mesh with the waiver language of 
the state constitution.  Wis. Const. art. I, § 5.  This theory 
neatly avoids the constitutional question, shifts the focus from 
the court's decision-making to the defendant's decision-making, 
and significantly alters review of circuit court action.  It is 
not correct. 
B 
¶129 The second problem with the majority's analysis is 
that there is no formal or logical linkage between the phrase in 
Wis. Stat. § 804.12(2)(a)3., authorizing "judgment by default" 
against a disobedient party, and Wis. Stat. § 806.02, the 
default judgment statute.  In Chevron Chemical Co. v. Deloitte & 
Touche, 207 Wis. 2d 43, 557 N.W.2d 775 (1997) (Chevron II), this 
court recognized that default as a sanction is "not a typical 
default judgment case."  Id. at 48.  The Chevron II court noted 
that "issues of fact and law were joined and the defendant 
appeared at trial."  Id.  Thus, the Chevron II court determined 
that the default sanction was "not governed by § 806.02."  Id. 
(emphasis added). 
¶130 The present case, involving another judicial sanction, 
also is not a typical default judgment case.  The defendant did 
not forgo the right of trial by jury by failing to answer the 
complaint or failing to appear in court.  The circuit court took 
away the right and entered judgment as a sanction.  It would 
appear self-evident that the entry of judgment by default on 
these facts should be treated and reviewed differently from a 
No.  2006AP813.dtp 
 
13 
default judgment entered on the basis of a defendant's failure 
to answer the complaint. 
C 
¶131 The third problem with the majority's analysis comes 
from a close examination of Wis. Stat. § 806.02.  Careful 
examination reveals why the statute does not govern judgments by 
default in sanction cases. 
1 
¶132 Subsection (1) reads: "A default judgment may be 
rendered as provided [in sub. (1)] if no issue of law or fact 
has been joined and if the time for joining issue has expired."  
Wis. Stat. § 806.02(1).  In a sanction case, a sanctioned 
defendant is very likely to have joined issue by filing an 
answer to the complaint.  The circuit court's decision to strike 
an answer is materially different from a defendant's failure to 
file an answer.  To utilize subsection (1), the court must 
disregard the historical fact that the defendant answered the 
complaint. 
2 
¶133 Subsection (2) provides: "After filing the complaint 
and proof of 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 plaintiff may move for judgment 
according to the demand of the complaint."  Wis. Stat. 
§ 806.02(2) (emphasis added).  In this case, the plaintiff did 
not move for judgment with an affidavit averring that WMAS was 
in default for failure to join issue.  On April 22, 2005, the 
plaintiff moved to strike WMAS's pleadings as a discovery 
No.  2006AP813.dtp 
 
14 
sanction.  This was not a § 806.02 motion.  It was a Wis. Stat. 
§ 804.12(2)(a)3. motion. 
3 
¶134 Subsection (2) also provides that: "If the amount of 
money sought was excluded from the demand for judgment, as 
required under s. 802.02(1m), the court shall require the 
plaintiff to specify the amount of money claimed and provide 
that information to the court and to the other parties prior to 
the court rendering judgment."  Wis. Stat. § 806.02(2) (emphasis 
added).  That did not happen here.  On November 4, 2005, the 
circuit court issued a memorandum and order striking the 
pleadings and granting default judgment against WMAS pursuant to 
§ 806.02.  On November 28, 2005, the court signed a formal order 
that said in part: "Default judgment is entered against WMAS in 
favor of Plaintiff."  A hearing on damages was not held until 
February 27-28, 2006, nearly four months later. 
¶135 Subsection 
(3), like subsection (2), appears to 
require 
proof 
"before 
entering 
a 
judgment 
against 
such 
defendant."  Wis. Stat. § 806.02(3) (emphasis added). 
¶136 In short, the circuit court may have acted correctly 
in 
entering 
judgment 
by 
default 
under 
Wis. 
Stat. 
§ 804.12(2)(a)3., but it did not follow the provisions of Wis. 
Stat. § 806.02.  If the majority insists upon the applicability 
of § 806.02, it cannot conclude that the circuit court correctly 
followed that statute.4 
                                                 
4 For discussion of Wis. Stat. § 806.02(2), see Stein v. 
Illinois State Assistance Commission, 194 Wis. 2d 775, 782, 535 
N.W.2d 101 (Ct. App. 1995). 
No.  2006AP813.dtp 
 
15 
4 
¶137 Subsection (2) further provides: "If proof of any fact 
is necessary for the court to give judgment, the court shall 
receive the proof."  Wis. Stat. § 806.02(2) (emphasis added).  
Subsection (5) provides in part: "If proof of any fact is 
necessary for the court to render judgment, the court shall 
receive the proof."  Wis. Stat. § 806.02(5) (emphasis added). 
¶138 The Judicial Council Committee's Note to Wis. Stat. 
§ 806.02 from 1977 reads in part:  
Sub. (5) has been modified to allow a judge in a 
default 
judgment 
matter 
to 
receive 
rather 
than 
mandatorily hear the proof of any fact necessary for a 
court to render judgment.  This change allows a judge 
the option of in-chamber consideration of affidavits 
presented by attorneys.  Under the present language 
the time of the judge may be taken up in open court 
hearing proof presented by the attorney orally whereas 
proof submitted by the attorney in the form of 
affidavits may be just as competent and trustworthy. 
Judicial 
Council Committee's Note, 1977, § 806.02, Stats. 
(emphasis added). 
¶139 The Judicial Council Note from 1981 indicates that the 
identical change had been made to subsection (2).  Judicial 
Council Note, 1981, § 806.02, Stats. 
¶140 These proof by affidavit provisions are much easier to 
justify when a party has, in fact, defaulted, that is, when a 
party has consciously given up the right to a trial either by a 
jury or by the court.  These provisions are very difficult to 
justify if the right of trial by jury has been taken away as a 
sanction, because the court's decision to impose a sanction 
would arguably give the court the right to skip a time-consuming 
hearing on damages altogether. 
No.  2006AP813.dtp 
 
16 
¶141 Taking points B and C together, there is no linkage 
between "judgment by default" under Wis. Stat. § 804.12(2)(a)3. 
and "default judgment" under Wis. Stat. § 806.02.  A close 
examination of § 806.02 makes it clear that this statute does 
not govern "judgment by default" imposed as a sanction.  
Consequently, the majority's reliance upon Wisconsin precedent 
under § 806.02 and federal cases under Federal Rule of Civil 
Procedure 55 is not on point.5 
D 
¶142 The fourth problem with the majority's analysis is 
that it overlooks critical precedent circumscribing a court's 
right to strike pleadings as a sanction.  This court has held 
that the trial court has "an inherent power to dismiss a 
complaint and also to strike an answer and grant a default 
judgment, but . . . the exercise of the power is limited by the 
requirement of due process of the fourteenth amendment of the 
United States Constitution."  Hauer, 43 Wis. 2d at 154 (emphasis 
added).  Denial of a party's demand for trial by jury at the 
same time judgment by default is granted underscores the need 
for sound discretion that satisfies the requirements of due 
process. 
                                                 
5 The majority opinion quotes a decision from the Fifth 
Circuit: "Assuming that [the party] had the right to a jury 
trial he waived that right when he purposefully chose not to 
answer the suit and timely request such a trial."  Majority op., 
¶48 (quoting Dierschke v. O'Cheskey, 975 F.2d 181, 185 (5th Cir. 
1992)) (emphasis added).   
This authority is not applicable; WMAS answered Rao's 
amended complaint on June 2, 2005.  
No.  2006AP813.dtp 
 
17 
¶143 In Gipson Lumber Co. v. Schickling, 56 Wis. 2d 164, 
201 N.W.2d 500 (1972), the court applied this due process 
principle to a discovery case:   
While 
sec. 
885.11(5), 
Stats.,[6] 
does 
not 
specifically refer to a refusal to produce documents 
under subpoena duces tecum, which seems to be the main 
ground 
upon 
which 
the 
trial 
court 
struck 
the 
answer, . . . we consider the section to be broad 
enough to embrace the failure to obey such a subpoena 
used with a discovery examination. . . .    
The constitutionality of statutes similar to sec. 
885.11(5), Stats., has been considered and upheld 
providing the court exercising the power remains 
within the bounds of due process of law. Three major 
cases have laid down guidelines.[7]  These cases were 
reviewed in Hauer v. Christon, 43 Wis. 2d 147, 168 
N.W.2d 81 [1969], and the teaching is that a judge may 
strike an answer for noncompliance within the bounds 
of due process when the evidence withheld relates to 
an essential element of the defense so as to warrant a 
presumption of lack of merit and the disobedience is 
not the result of an inability on the part of the 
defendant to perform. 
Id. at 168-69 (emphasis added) (footnote omitted). 
¶144 Both Hauer and Gipson predate this court's adoption of 
the Wisconsin Rules of Civil Procedure.  However, the procedure 
rules include Wis. Stat. § 805.01(1), which reads: "Right 
                                                 
6 Wisconsin Stat. § 885.11(5) currently reads: "Striking out 
pleading.  If any party to an action or proceeding shall 
unlawfully refuse or neglect to appear or testify or depose 
therein, either within or without the state, the court may, 
also, strike out the party's pleading, and give judgment against 
the party as upon default or failure of proof."  The current 
subsection is virtually identical to the subsection when Gipson 
Lumber Co. v. Schickling, 56 Wis. 2d 164, 201 N.W.2d 500 (1972), 
was decided. 
7 The court cited Societe Internationale Pour Participations 
Industrielles Et Commerciales, S.A. v. Rogers, 357 U.S. 197 
(1958), Hammond Packing Co. v. Arkansas, 212 U.S. 322 (1909), 
and Hovey v. Elliott, 167 U.S. 409 (1897). 
No.  2006AP813.dtp 
 
18 
preserved.  The right of trial by jury as declared in Article I, 
Section 5, of the constitution or as given by a statute and the 
right of trial by the court shall be preserved to the parties 
inviolate."  Wis. Stat. § 805.01(1) (emphasis added).  This 
language is stronger than the language in Article I, Section 5.  
Moreover, the rules of civil procedure were adopted under Wis. 
Stat. § 751.12, which admonishes the court that its rules "shall 
not abridge . . . or modify the substantive rights of any 
litigant."  Thus, the rules of civil procedure cannot be held to 
diminish a party's rights to due process or trial by jury from 
what they were before the adoption of the civil procedure rules.  
III. WISCONSIN PRECEDENT 
¶145 Before attempting to articulate standards for circuit 
courts that impose sanctions that deprive a party of trial by 
jury, 
it 
may 
be 
useful 
to 
examine 
additional 
Wisconsin 
precedent. 
¶146 The relevant portions of Article I, Section 5 have 
been part of the Wisconsin Constitution since 1848.  Our 
constitution has always provided that, "The right of trial by 
jury shall remain inviolate, and shall extend to all cases at 
law without regard to the amount in controversy; but a jury 
trial may be waived by the parties in all cases in the manner 
prescribed by law."  Wis. Const. art. I, § 5.  From the 
beginning, judges and legislators have wrestled with the 
question of how to waive the right of jury trial. 
¶147 In Leonard v. Rogan, 20 Wis. 568 (1866), this court 
reviewed a dispute over a conveyance of real estate.  One 
question was whether the defendant, Mrs. Rogan, was entitled to 
No.  2006AP813.dtp 
 
19 
a trial by jury.  Id. at 568-71.  The court stated that "[i]n an 
action at law, the defendant is entitled to a trial by 
jury . . . unless she has waived it."  Id. at 571.  The court 
concluded that Mrs. Rogan had waived her right of jury trial 
because the record revealed that the action proceeded to trial 
before the judge alone, without objection.  Id.  "[I]n other 
words . . . the parties consented to that mode of trial."  Id. 
(emphasis added).  "If the defendant had demanded a trial by 
jury, as she might have done, . . . the question would have been 
very different."  Id.   
¶148 In another case, Home Insurance Co. v. Security 
Insurance Co., 23 Wis. 171 (1868), the court determined that it 
was too late for the defendant to object to a non-jury trial 
when it voluntarily waived the right to trial before a court and 
jury by stipulating in writing to trial before a referee.  Id. 
at 175.  The court noted that while the "legislature has not 
attempted to compel the parties to submit to a trial by referees 
in actions of this nature," id. at 174, the statute at issue 
provided that "all or any of the issues in this action, whether 
of fact or of law, or both, may be referred, upon the written 
consent of the parties."  Id. at 174.  The court explained that 
the parties "may waive their right under the constitution to 
have the [dispute] heard and determined by the courts and juries 
of the country."  Id.  The court held that it was not 
"incompetent" for the legislature to pass such laws, because the 
"validity of the transaction" depended "entirely on the will of 
the parties."  Id. 
No.  2006AP813.dtp 
 
20 
¶149 In Wooster v. Weyh, 194 Wis. 85, 216 N.W. 134 (1927), 
the defendant claimed he was deprived of his right to trial by 
jury.  Id. at 89.  The court's response: "The right he had to 
such trial by jury was one that may be waived.  It was clearly 
waived in this case by appellant proceeding to trial without in 
any manner calling the matter to the attention of the court or 
suggesting that a trial by jury on this issue was desired or 
demanded."  Id. at 91-92 (citations omitted). 
¶150 These cases supplement Wisconsin statutes of long 
standing that have explained how to waive a jury trial.  For 
instance, Section 2862 of the Revised Statutes of 1878 stated:   
Trial by jury may be waived by the several 
parties to an issue of fact in actions on contract, 
and with the assent of the court in other actions, in 
the following manner:   
1. 
By failing to appear at the trial.  
2. 
By 
written 
consent, 
in 
person 
or 
by 
attorney, filed with the clerk.  
3. 
By oral consent in open court, entered in 
the minutes.   
Wis. Stat. ch. 128, § 2862 (1878) (emphasis added).  This text 
remained intact until January 1, 1936.   
¶151 In 1935 the court revised then-existing Wis. Stat. 
§ 270.32 (1935) to read: "Jury trial, how waived.  Trial by jury 
may be waived by the several parties to an issue of fact by 
failing to appear at the trial; or by written consent filed with 
the clerk; or by consent in open court, entered in the minutes."  
S. Ct. Order, 217 Wis. v, ix (eff. Jan. 1, 1936).  Apart from 
short-lived revisions in the mid-1940s, see Petition of Doar, 
248 Wis. 113, 21 N.W.2d 1 (1945), this language stated the law 
No.  2006AP813.dtp 
 
21 
until the court revised the rules of civil procedure in 1975, 
effective in 1976. 
¶152 These statutes and cases demonstrate that waiver of 
the constitutional right of jury trial in civil cases has 
historically 
tracked 
traditional 
principles 
of 
waiver 
or 
forfeiture: affirmative or consensual action by one or more of 
the parties to surrender the right, or obvious failure by any 
party to assert the right.  The steadfast maintenance of true 
waiver and forfeiture principles underlies the importance of the 
right being waived. 
¶153 Wisconsin precedent honors the right of jury trial.  
In Schmidt v. Riess, 186 Wis. 574, 203 N.W. 362 (1925), this 
court observed:   
Jurors are obtained from the various walks of life, 
with various degrees of knowledge and experience and 
with various interests, and, it must be assumed and 
admitted, with certain prejudices. . . .  Unconscious 
prejudices exist with some in favor of the plaintiff, 
and with others in favor of the defendant.  But after 
conceding all of these various elements that enter 
into the make-up of the personnel of the jurors and of 
the jury, it is largely designed that the average 
judgment of twelve men and women chosen from the 
citizenship of the community in which the parties 
reside will meet the requirements of justice, and that 
a verdict of the jury will be a true and just one. 
Id. at 579-80. 
¶154 Schmidt was a case in which the amount of damages was 
at issue.  The court noted that "[t]he assessment of damages in 
a 
personal 
injury 
case 
presents 
a 
matter . . . which 
is 
peculiarly within the field of a jury to determine."  Id. at 
579.  In DeKeyser v. Milwaukee Automobile Insurance Co., 236 
Wis. 419, 431, 295 N.W. 755 (1941), this court made a stronger 
No.  2006AP813.dtp 
 
22 
statement 
that 
"assessment 
of 
damages 
is 
solely 
a 
jury 
function."  Again in Schultz v. Miller, 259 Wis. 316, 327, 48 
N.W.2d 477 (1951), the court said "[t]he award of damages is 
within the province of the jury."  Many additional cases could 
be cited. 
¶155 In sum, "[t]he parties to an action are entitled to a 
jury trial on all issues of fact, including that of damages."  
Jennings v. Safeguard Ins. Co., 13 Wis. 2d 427, 431, 109 
N.W.2d 90 (1961) (citing Wis. Const., art. I, § 5). 
IV. STANDARDS 
¶156 The challenge in this case is to reconcile the 
judicial holdings that eloquently articulate the importance of 
trial by jury for deciding issues of fact, including the issue 
of damages, with the clear precedent that courts have authority 
to strike out pleadings or parts thereof and render a judgment 
by default when a defendant fails to comply with a court order. 
¶157 In Johnson v. Allis Chalmers Corp., 162 Wis. 2d 261, 
470 N.W.2d 859 (1991), this court discussed judicial authority, 
both statutory and inherent, to sanction parties "for failure to 
prosecute, failure to comply with procedural statutes or rules, 
and for failure to obey court orders."  Id. at 273-74.  
Appropriate sanctions under Wis. Stat. § 804.12, the court said, 
include orders that designated facts be taken as established as 
well as orders that refuse the delinquent party the right to 
support or oppose designated claims or defenses, or that strike 
out pleadings or parts of pleadings, or that render judgment by 
default.  Id. at 274. 
No.  2006AP813.dtp 
 
23 
¶158 The court, speaking through Justice William Bablitch, 
made these telling observations:   
The latitude circuit courts in Wisconsin have to 
dismiss actions as a sanction is demonstrated by sec. 
805.03, Stats., which permits dismissal whenever a 
party fails "to obey any order of the court."  
Although this language could be viewed as permitting 
dismissal 
for 
noncompliance 
with 
even 
trivial 
procedural orders, closer examination of the statute 
reveals that the court may only impose such orders "as 
are 
just." 
 
Furthermore, 
the 
Judicial 
Council 
Committee's Note . . . emphasizes that "[b]ecause of 
the harshness of the sanction, a dismissal under this 
section should be considered appropriate only in cases 
of egregious conduct by a claimant."  Our case law 
establishes that dismissal is improper, i.e. not 
"just," unless bad faith or egregious conduct can be 
shown on the part of the noncomplying party. 
Johnson, 162 Wis. 2d at 274-75 (citations omitted) (brackets in 
original).  The court added that dismissal is a sanction that 
should rarely be granted and is appropriate only in cases of 
egregious conduct.  Id. at 275 (citing Trispel v. Haefer, 89 
Wis. 2d 725, 732, 279 N.W.2d 242 (1979)). 
¶159 Striking a defendant's pleadings is roughly equivalent 
to dismissing a plaintiff's case and should be subject to 
similar standards.  The following standards may be useful. 
¶160 First, to strike a party's pleadings as a sanction, a 
circuit court must show that the noncomplying party's conduct 
was "egregious or in bad faith and without a clear and 
justifiable excuse."  Smith, 224 Wis. 2d at 526 (internal 
quotation marks and citation omitted); see also Schultz v. 
Sykes, 2001 WI App 255, ¶9, 248 Wis. 2d 746, 638 N.W.2d 604 
(citing cases). 
No.  2006AP813.dtp 
 
24 
¶161 Second, the decision to enter default judgment as a 
sanction "ought to be the last resort."  Adolph Coors Co. v. 
Movement Against Racism and the Klan, 777 F.2d 1538, 1542 (11th 
Cir. 1985).  Some federal courts consider it an "abuse of 
discretion" to impose judgment by default "if less draconian but 
equally effective sanctions" are available.  Id. at 1543 (citing 
cases).  
¶162 Third, the entry of judgment by default as a sanction 
must comply with due process.  This consideration was discussed 
in Dubman v. North Shore Bank, 75 Wis. 2d 597, 249 N.W.2d 797 
(1977):   
This court has held that there is an inherent power to 
strike pleadings in a proper case. . . .  
Defendant claims that the order . . . imposes 
sanctions for contempt of court. If so, it is 
appealable.  However, both Hauer v. Christon and 
Gipson Lumber Co. v. Schickling . . . hold that the 
sanction of striking a pleading may not be exercised 
as a contempt penalty.  The power can be exercised 
when 
evidence 
is 
withheld 
which 
relates 
to 
an 
essential element of the defense so as to warrant a 
presumption of fact that the defense has no merit. If 
imposed solely for failure to obey court orders, 
without evidence warranting a finding of no merit or 
bad 
faith, 
the 
sanction 
of 
striking 
a 
pleading . . . denies due process of law. 
Dubman, 
75 
Wis. 2d at 
600-01 
(emphasis 
added) 
(citations 
omitted).8 
                                                 
8 "[T]here are constitutional limitations upon the power of 
courts, even in aid of their own valid processes, to dismiss an 
action without affording a party the opportunity for a hearing 
on the merits of his cause."  Societe Internationale, 357 U.S. 
at 209. 
No.  2006AP813.dtp 
 
25 
¶163 Fourth, a circuit court must have discretion to narrow 
the focus of a damages hearing if the narrowing is "just" to the 
plaintiff.  Striking a defendant's answer will normally settle 
the issue of the defendant's liability.  In this case, however, 
when the circuit court struck the defendant's answer it made the 
defendant liable for: (1) vicarious liability for WMAS's 
employee's 
unlawful 
acts 
of 
conversion; 
(2) 
intentional 
misrepresentation; (3) strict responsibility misrepresentation; 
(4) negligent misrepresentation; (5) breach of fiduciary duty; 
(6) negligence; (7) breach of the implied duty of good faith in 
performance of a contract; and (8) breach of contract.  See 
majority op., ¶9.  Imposing liability on eight different causes 
of action complicated the task of determining damages.  The 
claims appear to be inconsistent.  A court should have the 
ability to narrow the issues for a damages hearing. 
¶164 Fifth, striking a defendant's answer does not settle 
the amount of compensatory damages.9  The amount of compensatory 
damages remains an open question that requires proof of 
additional facts.  The burden of proving the amount of damages 
remains with the party entitled to judgment. 
¶165 In Apex Electronics Corp. v. Gee, 217 Wis. 2d 378, 
380, 577 N.W.2d 23 (1998), this court stated that a circuit 
court entering a default judgment on a punitive damages claim 
must make inquiry beyond the complaint to determine the merits 
of the punitive damages claim and the amount of punitive 
                                                 
9 See U.S. for the Use of M-CO Constr., Inc. v. Shipco Gen., 
Inc., 814 F.2d 1011, 1014 (5th Cir. 1987) (interpreting Federal 
Rule of Civil Procedure 37(b)). 
No.  2006AP813.dtp 
 
26 
damages, if any, to be awarded.  The court's analysis is equally 
applicable to a plaintiff who seeks unliquidated compensatory 
damages.  Id. at 387-88; see also Gaertner v. 880 Corp., 131 
Wis. 2d 492, 505-06, 389 N.W.2d 59 (Ct. App. 1986). 
¶166 Because judgment by default pursuant to Wis. Stat. 
§ 804.12(2)(a)3. is not governed by Wis. Stat. § 806.02, Chevron 
II, 207 Wis. 2d at 48, this court cannot rely on pronouncements 
in § 806.02 cases that the court has the prerogative either to 
hold a hearing or inquiry on damages or to receive proof by 
affidavit.  This court must decide how to determine damages when 
judgment by default is the result of judicial sanction, rather 
than waiver.  It should not automatically conclude that a 
circuit court may disregard a defendant's demand for a jury 
trial to decide the issue of damages when that factual issue 
remains in dispute.  Pointing to § 806.02 for judicial authority 
to deny trial by jury locks the court into judicial discretion 
to use only affidavits in determining damages. 
¶167 The case law under Federal Rule of Civil Procedure 
37(b) holds that a default may not be claimed as to damages 
"without a hearing unless the amount claimed is a liquidated sum 
or one capable of mathematical calculation."  United Artists 
Corp. v. Freeman, 605 F.2d 854, 857 (5th Cir. 1979) (citing 
Flaks v. Koegel, 504 F.2d 702, 707 (2d Cir. 1974); Eisler v. 
Stritzler, 535 F.2d 148, 153-54 (1st Cir. 1976)).  If there is 
no dispute as to the amount of damages either because of the 
No.  2006AP813.dtp 
 
27 
amount lawfully pled in the complaint10 or because the amount is 
easily and objectively ascertainable, there should be no need 
for the defendant to continue to demand a jury and no need for a 
court to honor that demand. 
¶168 However, if an evidentiary hearing is required to 
determine the amount of damages, a defendant's demand for a jury 
trial must be considered, just as a plaintiff's demand would 
have to be considered. 
¶169 There are numerous reasons why the right of jury trial 
should be maintained in this situation: 
a. 
The statutes nowhere authorize a circuit court to deny 
trial by jury per se.  If they did, courts could sanction 
parties by denying the right of jury trial as a separate 
sanction, even when they did not strike out pleadings or enter 
judgment by default. 
b. 
When a circuit court strikes a defendant's pleadings 
under 
Wis. 
Stat. 
§ 804.12(2)(a)3., 
it 
imposes 
a 
drastic 
sanction.  When the court thereafter denies a jury trial to 
determine the amount of damages, it is imposing an additional 
sanction on the defendant that requires additional justification 
                                                 
10 Generally, with respect to a tort claim seeking recovery 
of money, the demand for judgment may not specify the amount of 
money the pleader seeks.  Wis. Stat. § 802.02(1m)(a).  However, 
this general rule does not control the complaint in all other 
cases. 
No.  2006AP813.dtp 
 
28 
if it is to comport with due process.11  The second sanction does 
not follow automatically from the first sanction. 
c. 
The circuit court may not deny a jury trial to the 
plaintiff on the issue of damages if the plaintiff wants a jury.  
A plaintiff does not automatically relinquish the right of jury 
trial by filing a motion to strike the defendant's pleadings as 
a sanction for discovery violations.  See Morrison v. Rankin, 
2007 WI App 186, ¶14, 305 Wis. 2d 240, 738 N.W.2d 588.  There is 
something quite unfair, however, in honoring the request for a 
jury trial for one side but not the other. 
d. 
The circuit court could not exclude the defendant from 
a jury trial if other defendants still had the right to claim a 
jury trial.  See Wis. Stat. § 805.01(3).  A sanctioned defendant 
may not be able to escape liability, but a sanctioned defendant 
ought to be able to establish the extent of its liability in 
relation to other defendants. 
e. 
If punitive damages come into play, a defendant ought 
to be able to ask a jury to consider compensatory and punitive 
damage claims at the same time.  See Trinity Evangelical 
Lutheran Church and School-Freistadt v. Tower Ins. Co., 2003 WI 
46, 261 Wis. 2d 333, 661 N.W.2d 789. 
¶170 The above conclusions are in accord with the law of 
Michigan and Florida.  These states preserve a defendant's right 
                                                 
11 The 
circuit 
court's 
explanation 
of 
its 
additional 
sanction here was: "The motion for a jury trial is denied.  I 
don't think that a person in default is entitled to a jury trial 
on an issue of damages, although they are permitted to 
participate in that hearing on damages." 
No.  2006AP813.dtp 
 
29 
of trial by jury on the issue of damages when a sanction of 
default is entered against that defendant. 
¶171 In 
Wood 
v. 
Detroit 
Automobile 
Inter-Insurance 
Exchange, 321 N.W.2d 653 (Mich. 1982), the trial court entered 
default judgment against the defendant for failure to timely 
respond to interrogatories following two court orders requiring 
a response.  Id. at 655-56.  But on appeal, the Michigan Supreme 
Court rejected the notion that a defendant's default "cancels" a 
prior jury trial demand or constitutes the functional equivalent 
of waiver.  Id. at 658-59.   
¶172 The Wood court determined that Rule 520 of the 
Michigan General Court Rules of 1963 controlled entry of default 
judgment.  Id. at 659.  Specifically, the Wood court cited Rule 
520, which preserved "a right of trial by jury to the parties 
when and as required by the constitution" in cases where (as 
here) the trial court must initiate further proceedings to 
determine damages on default.  Id. at 659 n.12, 660 (quoting 
Rule 520.2(2) of the Michigan General Court Rules of 1963).  The 
Wood court noted that the Michigan Constitution stated that 
"[t]he right of trial by jury shall remain, but shall be waived 
in all civil cases unless demanded by one of the parties in the 
manner prescribed by law."  Wood, 321 N.W.2d at 660 (quoting 
Mich. Const., art. 1, § 14 (1963)).12  Since the defendant in 
Wood had not waived its right to jury trial, the court concluded 
that "the trial court . . . was obliged to accord defendant its 
                                                 
12 This language is similar to that of Wis. Const. art. I, 
§ 5. 
No.  2006AP813.dtp 
 
30 
properly preserved right to jury trial."  Wood, 321 N.W.2d at 
660 (footnote omitted). 
¶173 The Michigan Supreme Court reaffirmed its Wood holding 
in Zaiter v. Riverfront Complex, Ltd., 620 N.W.2d 646, 651-53 
(Mich. 2001).  Zaiter involved a default entered against a 
defendant for failure to participate in discovery.  Id. at 647.  
The Zaiter defendant requested a jury trial by relying on the 
plaintiff's demand for jury trial.  Id.   
¶174 The 
Zaiter 
court 
construed 
Michigan 
Court 
Rule 
2.603(B)(3)(b) (1985), which replaced Michigan General Court 
Rule 520.  Id. at 651-52.  The Michigan court noted that the new 
rule included the phrase "to the extent required by the 
constitution," 
instead 
of 
"when 
and 
as 
required 
by 
the 
constitution," and determined that "[n]o substantive change was 
intended by that rephrasing."  Id. at 652, 652 n.11.  Thus, the 
Zaiter court held that the defendant had the right to a jury 
trial on damages when default was entered against it as a 
sanction.  Id. at 652. 
¶175 Wood and Zaiter are not distinguishable from WMAS's 
case in any meaningful way.  All three cases involve default 
entered by the trial court as a sanction against a defendant who 
requested a jury trial.  In each case, after judgment was 
entered the trial court held a hearing to determine the amount 
of damages.  In each case, the civil procedure rules and 
constitutional provisions at issue provided that the right to a 
jury trial was preserved unless waived.  Thus, default, even as 
a sanction, does not constitute a waiver of the jury trial 
No.  2006AP813.dtp 
 
31 
right.  See Zaiter, 620 N.W.2d at 652 (citing Wood, 321 
N.W.2d at 653).   
¶176 Since the defendants in Wood and Zaiter invoked their 
right to a jury trial, and did not waive the right, they were 
entitled to a jury trial on the issue of damages.  The same 
result should follow in the instant case.  The majority's 
extraordinary response is that the court has given judges the 
right, in their discretion, to consider jury rights "waived."  
See majority op., ¶54. 
¶177 The Florida Supreme Court addressed the issue of 
waiver of the right to a jury trial in the default judgment 
context in Curbelo v. Ullman, 571 So. 2d 443 (Fla. 1990).  In 
Curbelo, a default judgment was entered against defendant 
Curbelo for failure to answer.  Id. at 444.  The trial court 
found damages against Curbelo in a non-jury trial, despite the 
plaintiff's earlier request for a jury.  Id.   
¶178 The Florida Supreme Court determined that "[w]hen a 
jury trial has been requested by the plaintiff, the defendant is 
still entitled to a jury trial on the issue of damages even 
though a default has been entered against the defendant for 
failure to answer or otherwise plead."  Id. (citation omitted).  
The court cited a Florida rule of civil procedure for the 
proposition that "a demand for trial by jury may not be 
withdrawn 'without the consent of the parties.'"  Id. (quoting 
No.  2006AP813.dtp 
 
32 
Fla. R. Civ. P. 1.430(d)).13  The Florida Supreme Court held that 
"consent to waiver must be manifested by affirmative action such 
as a specific waiver in writing or by announcement in open 
court."  Id. (internal quotation marks and citation omitted).  
Since there was no "affirmative manifestation," the Curbelo 
court found that Curbelo did not waive his right to a jury 
trial.  Id. 
¶179 Florida courts applying the Florida Rules of Civil 
Procedure have consistently adopted the logical position that 
waiver of the right to a jury trial requires some affirmative 
action or consent by the parties.  See, e.g., Barth v. Fla. 
State Constructors Serv., Inc., 327 So. 2d 13, 15 (Fla. 1976); 
Baron Auctioneer, Inc. v. Ball, 674 So. 2d 212, 213-14 (Fla. 
Dist. Ct. App. 1996); Jayre, Inc. v. Wachovia Bank & Trust Co., 
N.A., 420 So. 2d 937, 938 (Fla. Dist. Ct. App. 1982).  In 
Florida the right to trial by jury is preserved absent waiver, 
even when the opposing party, not the proponent of the right, 
has made the demand for trial by jury.  Curbelo, 571 So. 2d at 
444. 
¶180 In sum, these decisions from Michigan and Florida 
indicate that the right to trial by jury, when properly 
demanded, is preserved despite the fact that default judgment 
was entered against one party as a sanction. 
                                                 
13 The quoted language from Florida Rule of Civil Procedure 
1.430(d) is virtually identical to that found in the Wisconsin 
Statutes.  Wis. Stat. § 805.01(3) ("A demand for trial by jury 
made as herein provided may not be withdrawn without the consent 
of the parties.").   
No.  2006AP813.dtp 
 
33 
¶181 In Wisconsin, a "default judgment" entered under Wis. 
Stat. § 806.02 may be distinguished from a "judgment by default" 
entered as a sanction under Wis. Stat. § 804.12(2)(a)3., and 
courts acting under Wis. Stat. § 806.02 have broad discretion on 
how to proceed.  In a real default, a defendant cedes that 
authority to the circuit court by its failure to assert its 
right to a trial.  To apply the same sort of "waiver" principles 
to a judge's sanction, however, is to create a fiction that 
diminishes the valued constitutional right of jury trial.   
¶182 For the reasons stated, I respectfully dissent. 
¶183 I am authorized to state that Justice PATIENCE DRAKE 
ROGGENSACK joins this dissent.   
 
 
 
 
No.  2006AP813.dtp 
 
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