Title: Gary Richards v. First Union Securities, Inc.

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2006 WI 55 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2004AP1877 
 
 
COMPLETE TITLE: 
 
 
Gary Richards, 
          Plaintiff-Respondent-Petitioner, 
     v. 
First Union Securities, Inc., 
          Defendant-Appellant. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2005 WI App 164 
Reported at: 284 Wis. 2d 530, 702 N.W.2d 45 
(Ct. App. 2005 – Published) 
 
 
OPINION FILED: 
May 31, 2006   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
March 21, 2006   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Waukesha   
 
JUDGE: 
Robert G. Mawdsley 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
        
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the plaintiff-respondent-petitioner, there were briefs 
by James Bolt and James A. Bolt Law Office, Fitchburg, and oral 
argument by James Bolt. 
 
For the defendant-appellant, there was a brief by Michael 
H. Schaalman, Robert J. Pluta, Brian D. Winters, and Quarles & 
Brady LLP, Milwaukee, and oral argument by Michael H. Schaalman. 
 
 
2006 WI 55
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2004AP1877  
(L.C. No. 
2002CV1773) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Gary Richards, 
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
First Union Securities, Inc., 
 
          Defendant-Appellant. 
 
 
 
FILED 
 
MAY 31, 2006 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
remanded.   
 
¶1 
N. 
PATRICK 
CROOKS, 
J.  Petitioner 
Gary 
Richards 
(Richards) seeks review of a published court of appeals' 
decision1 reversing the circuit court's denial of defendant First 
Union Securities, Inc.'s (First Union) motion to reopen a 
default judgment against it pursuant to Wis. Stat. § 806.07 
                                                 
1 Richards v. First Union Sec., Inc., 2005 WI App 164, 284 
Wis. 2d 530, 702 N.W.2d 45. 
No. 
2004AP1877   
 
2 
 
(2003-04).2  We address two issues on appeal.  First, which party 
has the burden of proof on a motion under § 806.07 to set aside 
or vacate a default judgment, where the motion involves the 
question of whether the service was proper?  Second, how should 
a court construe the terms "officer, director or managing agent" 
pursuant to Wis. Stat. § 801.11(5)(a)?   
¶2 
We reverse the decision of the court of appeals.  We 
hold that the burden of proof is on the party seeking, pursuant 
to Wis. Stat. § 806.07, to set aside or vacate a default 
judgment, where the question of proper service is involved.  
Furthermore, we determine that the test set forth in Carroll v. 
Wisconsin Power & Light Co., 273 Wis. 490, 79 N.W.2d 1 (1956), 
is the appropriate one to determine who is a managing agent 
pursuant to Wis. Stat. § 801.11(5)(a).  We remand this case to 
the circuit court for further action consistent with this 
opinion, 
including 
evidentiary 
proceedings 
involving 
an 
application of the Carroll test, as well as providing an 
opportunity for a thorough review and explanation on the issue 
of whether the motion of First Union was timely, and whether 
Ronald McGrath (McGrath) was an officer, director, or managing 
agent of First Union.  Upon remand, the circuit court must make 
findings of fact and conclusions of law relating to the evidence 
which will be presented to it.    
 
                                                 
2 All references to the Wisconsin Statutes are to the 2003-
04 version unless otherwise indicated. 
No. 
2004AP1877   
 
3 
 
I 
¶3 
On July 23, 2002, Richards filed an action in Waukesha 
County Circuit Court against First Union,3 in part to recover 
investment losses as the result of alleged violations of the 
antifraud sections of the Wisconsin Uniform Securities Law.  The 
next day Richards’ process server, Carlton Manske (Manske), 
attempted to serve a copy of the summons and complaint on the 
defendant by serving Kim Wisniewski (Wisniewski), the operations 
manager of First Union’s Brookfield branch.  According to 
Manske's affidavit, upon arriving at First Union’s Brookfield 
branch, he stated the purpose of his appearance, asked the 
office personnel to identify and direct him to the individual 
authorized to accept service for the corporation, and confirmed 
the individual’s authority to accept service.  Manske was 
directed to Wisniewski, who accepted service.  Manske later 
filed with the circuit court an affidavit, which indicated that 
the manner of service was "Corporate Service: by leaving, during 
office hours, copies at the office of the person/entity being 
served, leaving same with the person apparently in charge 
thereof."   
¶4 
In September 2002 First Union contacted Richards to 
inform him that he had signed an arbitration agreement that 
required him to arbitrate his disputes.  Richards consented to 
stay the court case in favor of arbitration on the condition 
                                                 
3 Since the initiation of this action, Wachovia Securities 
acquired First Union Securities, Inc.   
No. 
2004AP1877   
 
4 
 
that First Union initiate a National Association of Securities 
Dealers, Inc.’s arbitration and pay the filing fee.  On October 
29, 2002, Richards sent a letter to First Union indicating that 
if the arbitration fee was not paid by November 5, 2002, he 
would withdraw the offer to arbitrate and proceed with the 
lawsuit.  First Union failed to pay the arbitration fee or file 
an answer to the action.  On November 12, 2002, Richards filed, 
in the circuit court, a motion for a default judgment, which 
included an affidavit from his counsel, James Bolt, stating that 
the summons and complaint were duly filed and served on the 
defendant’s registered agent.  The circuit court granted the 
motion.   
¶5 
One year later, on November 13, 2003, Richards sent 
First Union a letter demanding payment of the default judgment 
in the amount of $72,448.34, plus interest accrued since the 
date of the judgment.  Richards began garnishment proceedings 
when First Union failed to pay.  First Union filed an answer to 
the garnishment on February 9, 2004, and a motion to reopen the 
default judgment on February 25, 2004.  It apparently based its 
motion on Wis. Stat. § 806.07(1)(d) and (h). 
¶6 
First Union's motion to reopen the default judgment 
was based, in major part, on a claim of insufficient service of 
process under Wis. Stat. § 801.11.  The motion asked that the 
court dismiss Richards’ claims, or alternatively, First Union 
asked the court to issue a stay pending arbitration pursuant to 
Wis. Stat. § 788.02.  First Union included, in support of its 
motion, affidavits from the branch manager of its Brookfield 
No. 
2004AP1877   
 
5 
 
office, McGrath, and Wisniewski.  Wisniewski’s affidavit stated 
that she was not an officer, director, or managing agent of 
First Union, nor was she authorized to accept service.  She 
asserted that her duties were limited to ensuring that the 
brokers of the Brookfield office properly filled out forms for 
compliance 
with 
the 
rules 
and 
policies 
of 
First 
Union.  
Similarly, McGrath’s affidavit stated that he was not an 
officer, director, or managing agent of First Union, nor was he 
authorized to accept service; however he did acknowledge that he 
was the person in charge of the Brookfield branch office during 
the entire year of 2002.  McGrath also claimed that there were 
no officers, directors, or managing agents of First Union in 
Wisconsin, and that there were no employees or persons otherwise 
authorized to accept service in the state, except its registered 
agent.  He further stated that First Union was a foreign 
corporation, with CSC-lawyers Incorporating Service located in 
Madison as its registered agent to accept service in Wisconsin.   
¶7 
The circuit court, Judge Robert G. Mawdsley presiding, 
denied First Union’s motion, concluding "the record clearly 
reflects that defects in personal service were waived."   
¶8 
First Union appealed the decision of the circuit 
court.  On appeal, Richards filed a motion to strike the portion 
of First Union’s brief that asserted that, based on McGrath’s 
affidavit, the wrong office was served because Richards claimed 
McGrath’s status was never an issue in the circuit court, and 
thus was being improperly raised for the first time on appeal.  
In the alternative, Richards sought to amend the record on 
No. 
2004AP1877   
 
6 
 
appeal to include a statement made by McGrath in an affidavit in 
a different case, Wachovia Securities v. Eberle,4 (Eberle 
affidavit).  In the Eberle affidavit, McGrath stated he was a 
"Senior Vice President at Wachovia Securities and the Branch 
Manager of the Wachovia Securities office located in Brookfield, 
Wisconsin.  [His] responsibilities include supervising and 
training the employees in Wachovia’s Brookfield office."  The 
court of appeals denied Richards’ motion to strike, holding that 
the factual assertion was made in the circuit court, although 
not specifically litigated or addressed by the circuit court.  
Furthermore, the court of appeals denied Richards' motion to 
amend the record to include reference to the Eberle affidavit.   
¶9 
In a split decision, the court of appeals reversed the 
circuit court and allowed First Union to reopen the default 
judgment pursuant to Wis. Stat. § 806.07.  The majority held 
that First Union did not waive its right to object to the lack 
of personal jurisdiction.  Furthermore, based on the affidavits 
of Wisniewski and McGrath, the court of appeals held that 
Wisniewski was not a managing agent of First Union upon whom 
corporate service could be made directly, and McGrath, as the 
branch manager of the Brookfield branch office, also was not a 
managing agent of First Union.  Consequently, the service did 
not constitute proper service on the office of a managing agent 
under the alternative service option of Wis. Stat. 801.11(5)(a), 
which provides that "[i]n lieu of delivering the copy of the 
                                                 
4 Waukesha County Case No. 03CV2295 (September 23, 2003). 
No. 
2004AP1877   
 
7 
 
summons to the officer specified, the copy may be left in the 
office of such officer, director or managing agent with the 
person 
who 
is 
apparently 
in 
charge 
of 
the 
office."  
Wis. Stat. § 801.11(5)(a).  Therefore, since Richards had failed 
to comply with the rules for service of process, the circuit 
court did not have personal jurisdiction over First Union, and 
the default judgment was void.   
¶10 Judge 
Richard 
S. 
Brown 
dissented, 
arguing 
that 
although the majority acknowledged that First Union had the 
burden of proving ineffective service, it had, in effect, 
improperly shifted the burden of proving effective service to 
Richards.  In support of his position, Judge Brown cited the 
majority’s conclusion that there was "'scant evidence in the 
record'" to support McGrath’s status.  Richards, 284 Wis. 2d 
530, ¶24 (Brown, J. dissenting) (citation omitted).  Therefore, 
Judge Brown reasoned, First Union had not met its burden of 
proof, and the default judgment should stand.  Alternatively, 
because the record was devoid of information about McGrath’s 
authority and responsibilities, Judge Brown argued that the case 
should be remanded pursuant to Wis. Stat. § 752.35, as there had 
been no factual determination about McGrath’s status.   
¶11 Richards timely requested that the court of appeals 
reconsider its decision and remand the case to the circuit court 
for a hearing on the issue of whether McGrath was a managing 
agent.  The court of appeals denied Richards’ motion for 
reconsideration.  Richards petitioned this court for review; his 
petition was granted on November 15, 2005. 
No. 
2004AP1877   
 
8 
 
II 
¶12 The legal issues concerning the reopening of a default 
judgment and whether personal service was sufficient are 
dependent on the interpretation and application of statutes, and 
therefore are questions of law which an appellate court reviews 
de novo.  Useni v. Boudron, 2003 WI App 98, ¶8, 264 Wis. 2d 783, 
662 N.W.2d 672.  The procedural issues involve questions of law, 
and are therefore reviewed de novo as well.  See Paige K.B. v. 
Steven G.B., 226 Wis. 2d 210, 225, 594 N.W.2d 370 (1999).  A 
circuit court's findings of fact are reviewed to determine 
whether such findings are contrary to the great weight and clear 
preponderance of the evidence.  See West v. West, 82 Wis. 2d 
158, 165, 262 N.W.2d 87 (1978).5 
                                                 
5 Explaining the clearly erroneous standard of review 
regarding circuit court findings of fact, the court of appeals 
explained: 
While we now apply the "clearly erroneous" test as our 
standard of review for findings of fact made by a 
trial court without a jury, cases which apply the 
"great weight and clear preponderance" test to the 
same situation may be referred to for an explanation 
of this standard of review because the two tests in 
this state are essentially the same. 
Noll v. Dimiceli's, Inc., 115 Wis. 2d 641, 643, 340 N.W.2d 575 
(Ct. App. 1983)(citation omitted); see also Robertson-Ryan v. 
Pohlhammer, 112 Wis. 2d 583, 592, n.*, 334 N.W.2d 246 (1983) 
(Abrahamson, J., dissenting) (under Wis. Stat. § 805.17(2) 
(1983-84) the "clearly erroneous" test applicable to the 
findings of fact of a circuit judge sitting without a jury is 
the 
same 
as 
the 
"against 
the 
great 
weight 
and 
clear 
preponderance of the evidence" test). 
No. 
2004AP1877   
 
9 
 
¶13 First Union argues that the circuit court did not have 
personal jurisdiction over it, as Richards had failed properly 
to serve the corporation pursuant to Wis. Stat. § 801.11(5).  
Therefore, First Union requests that, because a judgment 
rendered without personal jurisdiction is void, the default 
judgment should be vacated.  See  id. at 166 (if a party obtains 
a judgment without obtaining personal service pursuant to the 
statute, the judgment is considered void).  Furthermore, First 
Union maintains that there is adequate evidence in the record to 
support the court of appeals' conclusion that there was 
inadequate service of process on First Union.   
¶14 Richards argues that First Union, as the moving party 
seeking to reopen the default judgment, has the burden of proof 
in support of the motion.  It is Richards' position that there 
was insufficient evidence in the record to determine that the 
judgment was void for lack of personal jurisdiction.  Richards 
further 
argues 
that 
McGrath, 
as 
branch 
manager 
for 
the 
Brookfield office, was a "managing agent" for First Union.  
Therefore, Richards concludes, First Union was adequately served 
pursuant to Wis. Stat. § 801.11(5)(a).   
¶15 Wisconsin Stat. § 806.07 allows relief from a judgment 
or order.  It provides, in relevant part, "[o]n motion and upon 
such terms as are just, the court . . . may relieve a party or 
legal representative from a judgment, order or stipulation for 
the following reasons: . . . (d) [t]he judgment is void. . . ."  
Wis. Stat. § 806.07(1).  A judgment is "void" for purposes of 
§ 806.07 when the court rendering it lacked subject matter or 
No. 
2004AP1877   
 
10 
 
personal jurisdiction. See Wengerd v. Rinehart, 114 Wis. 2d 575, 
338 N.W.2d 861 (Ct. App. 1983). 
A 
¶16 We first address the issue of which party bears the 
burden of proof on the issue of whether personal jurisdiction 
was obtained through proper service of process.  We agree with 
both the court of appeals' majority and dissent that there is 
"'scant evidence in the record'" upon which to ascertain whether 
McGrath was a "managing agent" for purposes of the statute.  See 
Richards, 284 Wis. 2d 530, ¶¶18-21, ¶24 (Brown, J. dissenting). 
¶17 We further agree with Judge Brown's dissent that, in 
general, the party invoking the judicial process in its favor 
bears the burden of production and persuasion.  Wolfe v. Wolfe, 
2000 WI App 93, ¶15, 234 Wis. 2d 449, 610 N.W.2d 222.  First 
Union, however, relies on Danielson v. Brody Seating Co., to 
argue that the burden of proving personal jurisdiction is 
properly placed on the party asserting jurisdiction. Danielson 
v. Brody Seating Co., 71 Wis. 2d 424, 427-28, 238 N.W.2d 531 
(1976).   
¶18 There are three principal cases we must examine to 
determine which party has the burden when a party seeks to 
reopen a default judgment and have a determination that such 
judgment was void:  Danielson, Emery v. Emery, 124 Wis. 2d 613, 
622, 369 N.W.2d 728 (1985), and West, 82 Wis. 2d 158. 
¶19 In Danielson, defendant Brody Seating Co. sought to 
dismiss 
the 
complaint 
against 
it 
for 
lack 
of 
personal 
jurisdiction on the ground of improper service.  Danielson, 71 
No. 
2004AP1877   
 
11 
 
Wis. 2d at 426.  At the circuit court hearing on the motion, 
Danielson "offered proof of service in the form of an affidavit 
of Deputy Sheriff V. Battista, in which he swears that he served 
the summons and complaint on the Brody Seating Company 'by 
delivering to and leaving with one M. Brody true copies' of the 
summons and complaint."   However, there was substantial 
evidence introduced to the circuit court that on the purported 
date of service, there was no officer, director, managing agent, 
or any other person associated with the corporation with the 
name M. Brody.  Id.  Even though the summons and complaint wound 
up on the desk of an individual upon whom service would have 
been effective, such notice was insufficient.  "Personal 
delivery requires that '. . . there must be a direct and actual 
delivery of the papers to the defendant himself by the one 
making service.'"  Id. at 429 (footnote omitted).6  Declaring 
that "[t]he burden of proving a defendant is subject to the 
jurisdiction of the court is on the plaintiff or the party 
asserting jurisdiction," the court held that Danielson had 
failed to meet that burden.  Id. at 427-28 (footnote omitted).   
¶20 Two years later, in West, this court, again, addressed 
the issue of which party bears the burden of proof that personal 
jurisdiction was obtained through proper service of process.  
                                                 
6 Regarding the alternative method of service of process, as 
there was "no evidence in the instant case that the summons was 
left with anyone associated with Brody Seating Company, much 
less with someone apparently in charge of the office," the court 
also rejected this argument.  Danielson v. Brody Seating Co., 71 
Wis. 2d 424, 430, 238 N.W.2d 531 (1976).   
No. 
2004AP1877   
 
12 
 
West, 82 Wis. 2d at 161.  West involved the sufficiency of 
service of a summons and complaint for divorce through the 
statutorily prescribed alternative service option of service by 
publication.  Service by publication required the plaintiff to 
establish first that he or she had used due diligence to serve 
the complaint personally but was unable to locate the defendant.   
¶21 In West, the decedent's estate appealed from an order 
that vacated a judgment of divorce granted to the decedent, 
because the circuit court concluded that personal service was 
ineffective.  This court upheld the decision of the circuit 
court, 
which 
"held 
that 
the 
attempted 
acquisition 
of 
jurisdiction by publication was ineffective, because there was a 
showing that due diligence had not been exercised to serve [the 
surviving spouse] personally," and therefore "held the judgment 
was void for want of personal jurisdiction. . . ."  Id.  at 164.   
¶22 Placing the burden on the party seeking to reopen and 
vacate the judgment, the West court stated: 
The question to be decided on the motion to 
vacate and to hold the judgment void is simply whether 
there was credible evidence to show that due diligence 
was not exercised. . . . On review, the test is that 
usually applied where findings of fact are made by a 
trial judge.  Are the findings of fact contrary to the 
great weight and clear preponderance of the credible 
evidence? 
Id. at 165.   
¶23 Several years later, in Emery, this court relied on 
West to hold that the burden of proof that service was 
insufficient was properly placed upon the party that sought to 
No. 
2004AP1877   
 
13 
 
reopen and vacate the judgment.  Emery, 124 Wis. 2d at 622; see 
also Haselow v. Gauthier, 212 Wis. 2d 580, 585, 587, 569 N.W.2d 
97 (Ct. App. 1997).   
¶24 In Emery, appellant husband brought an action to 
vacate a judgment of divorce for lack of personal jurisdiction.  
The circuit court had refused to vacate the divorce judgment, 
finding that the wife, Ms. Emery, had exercised "reasonable 
diligence in her attempt to serve Mr. Emery personally, and that 
Ms. Emery did comply" with the statutes "when she instituted 
substituted service by publication."  Emery, 124 Wis. 2d at 616.   
¶25 Among the husband's arguments, Mr. Emery contended 
"that the circuit court erred as a matter of law by placing the 
burden of proof upon Mr. Emery at the hearing on the motion to 
vacate the divorce judgment."  Id. at 622.  The court cited West 
to support its reasoning that the circuit court had "properly 
placed the burden upon Mr. Emery, who sought to vacate the 
judgment, to produce credible evidence to show that Ms. Emery 
did not exercise reasonable diligence in her attempt to 
personally serve him."  Id. 
¶26 The Emery court further concluded that Danielson "is 
distinguishable in that it involved a motion to dismiss a 
complaint for want of personal jurisdiction.  In the instant 
case we are dealing with a motion to vacate a judgment and the 
standard described in West applies."  Id. at 623.   
¶27 As was the case in Emery, First Union seeks to reopen 
and vacate a judgment, not dismiss a complaint.  We are not 
persuaded by First Union's argument claiming that, because a 
No. 
2004AP1877   
 
14 
 
judgment is void when there is want of personal jurisdiction, 
there is a special reason to place the burden of defending the 
judgment on the nonmoving party.  Placing such burden on the 
nonmoving party was specifically rejected by this court in 
Emery, where the court held that the burden properly was placed 
on the husband who brought the action to vacate the judgment of 
divorce for lack of personal jurisdiction.  Emery, 124 Wis. 2d 
at 622.  We conclude, therefore, that the standard articulated 
in Emery and West is the appropriate one to apply to the case at 
bar.  Therefore, we hold that the burden of proof is on the 
person seeking to reopen and set aside or vacate the default 
judgment.  Furthermore, we hold that the evidence necessary to 
set aside such a judgment is evidence sufficient to allow a 
court to determine that the circuit court's findings of fact 
were "'contrary to the great weight and clear preponderance of 
the credible evidence[].'"  Emery, 124 Wis. 2d at 622 (quoting 
West, 82 Wis. 2d at 165).   
B 
 
¶28 We next turn to the question of what it means to be a 
managing agent pursuant to Wis. Stat. § 801.11(5)(a), which is 
one 
way 
to 
satisfy 
the 
statutory 
service 
of 
process 
requirements.  As we have consistently held, actual notice of 
the plaintiff's action, alone, is insufficient.  See Danielson, 
71 Wis. 2d at 429.  An inquiry into the adequacy of service of a 
summons requires an examination of "whether the appropriate 
statutory procedures for service have been complied with."  Id. 
(footnote omitted). 
No. 
2004AP1877   
 
15 
 
¶29 Wisconsin Stat. § 801.11(5)(a) provides that proper 
service of a summons on a corporation or Limited Liability 
Company——service 
that 
is 
sufficient 
to 
convey 
personal 
jurisdiction——is achieved:  
By personally serving the summons upon an officer, 
director or managing agent of the corporation or 
limited liability company either within or without 
this state.  In lieu of delivering the copy of the 
summons to the officer specified, the copy may be left 
in the office of such officer, director or managing 
agent with the person who is apparently in charge of 
the office.   
Wis. Stat. § 801.11(5)(a). 
 
As 
the 
parties 
concede 
that 
Wisniewski was not a managing agent, one issue before this court 
is whether McGrath was a managing agent, and whether service 
was, therefore, effective under the alternate service option of 
§ 801.11(5)(a), since a copy was left at McGrath's office with 
Wisniewski.   
¶30 Richards argues that McGrath is just such a managing 
agent, and therefore First Union was successfully served.  First 
Union maintains that McGrath is not a managing agent, thus the 
circuit court did not have personal jurisdiction over it when 
the court issued its default judgment.   
¶31 In Carroll, this 
court 
examined 
the 
predecessor 
statute 
to 
Wis. Stat. § 801.11(5)(a)——Wis. Stat. § 262.09(3) 
(1955-56).  Carroll, 273 Wis. 490.  Section 262.09(3) described 
the persons upon whom a notice to a corporation——in that case a 
notice of injury——could be properly served.  "'If [the action 
is] against any other domestic corporation, [the summons may be 
No. 
2004AP1877   
 
16 
 
served by delivering a copy] to the president, vice president, 
superintendent, 
secretary, 
cashier, 
treasurer, 
director, 
trustee, 
or 
managing 
agent.'" 
 
Id. 
at 
492 
(quoting 
Wis. Stat. § 262.09(3) (1955-56)).  
¶32 Carroll involved the validity of service of process on 
N.A. Landt (Landt), who directed operations at Wisconsin Power & 
Light's generating station in Wisconsin Dells.  Id.  The 
question before the court was whether Landt was a "managing 
agent" pursuant to Wis. Stat. § 262.09(3) (1955-56).  The court 
acknowledged that Landt "directed operations at the plant, had 
charge of the machinery and its maintenance and had 25 men under 
him."  Id. at 493.  However, the court also noted that, while 
Landt recommended people for "employment in the generating 
plant, . . . the Madison office hired them."  Id.  Similarly, 
"Landt issued requests for supplies, but the purchases were made 
by the Madison office."  Id.   
¶33   "In construing the term 'managing agent' as it 
appears in such statutes," the Carroll court began, "this court 
has held that it relates to an agent having a general 
supervision of the affairs of the corporation."  Id.  (citing 
Upper Mississippi Transp. Co. v. Whittaker, 16 Wis. 233, [220*] 
(1862)).7  The court ultimately concluded that the terms 
                                                 
7 See also Nelson v. Stop and Ship Cos., 596 A.2d 4 (Conn. 
1991) which held that the terms "'general or managing agent or 
manager' are concomitant terms meaning a person whose position, 
rank, duties and responsibilities make it reasonably certain 
that the corporation will be apprised of service made upon that 
person."  Id. at 6 (citation omitted). 
No. 
2004AP1877   
 
17 
 
"superintendent" and "managing agent" had corresponding meanings 
in the statute.  "Both terms relate to a person possessing and 
exercising the right of general control, authority, judgment, 
and discretion over the business or affairs of the corporation, 
either on an overall or part basis, i.e., everywhere or in a 
particular branch or district."8  Carroll, 273 Wis. at 494 
(emphasis in original).  Noting that Landt's "authority was not 
general, but was limited to the management of the physical 
operation of the plant and its maintenance," the court concluded 
that he was not a managing agent for purposes of the service of 
process statute.  Id. 
¶34  In Derrick v. The Drolson Co., 69 N.W.2d 124 (Minn. 
1955), the Supreme Court of Minnesota adopted a test similar to 
that articulated by this court in Carroll.  Derrick involved the 
sufficiency of service of a summons upon a domestic corporation.  
In that case, a process server entered the office of The Drolson 
Company, asked for an officer, and was directed to Edward Vogt 
(Vogt).  The process server asked Vogt if he was an officer and 
the managing agent of the company, and Vogt allegedly responded 
that he was.  Id. at 126-27.  Vogt later denied such an 
acknowledgment.  The court concluded that Vogt was not an 
                                                 
8 Other jurisdictions have reached similar conclusions.  
See, e.g., Green v. Morningside Heights Hous. Corp., 177 
N.Y.S.2d 760 (1958), which concluded that the term "managing 
agent" was to be given a liberal interpretation, and while 
strict language might limit the definition to include persons 
who could be served to one who managed the entire corporation, 
the probable meaning would include one in charge of a branch 
office whose powers were general.  Id. at 761. 
No. 
2004AP1877   
 
18 
 
officer of the corporation, and therefore focused its inquiry on 
whether Vogt was a managing agent of the corporation authorized 
to receive service pursuant to the statutory requirements.9  The 
Minnesota court noted that the rationale behind the requirement 
that 
a 
managing agent be 
some person "invested by the 
corporation with general powers involving the exercise of 
judgment and discretion" was because "the agent must be one who 
could reasonably be expected to apprise the corporation of the 
service and the pendency of the action."  Id. at 129 (footnote 
omitted).  The court reasoned: 
It follows that the significant factors in determining 
whether a particular agent is a "managing agent" for 
the purpose of receiving service are the extent to 
which the agent has power to exercise independent 
judgment and discretion in executing the business of 
the corporation, and whether his position is of such a 
character and rank as to make it reasonably certain 
that the corporation will be apprised of the service. 
Id.   
¶35 We are satisfied that the Minnesota Supreme Court's 
decision in Derrick is quite helpful in applying the Carroll 
test 
and 
assisting 
a 
circuit 
court 
in 
determining 
what 
constitutes a managing agent.  We disagree with First Union that 
the record is sufficient for this court to determine whether 
                                                 
9 See Derrick v. The Drolson Co., quoting Minnesota Rules of 
Civil Procedure 4.03 which provided, in relevant part, that 
service of summons upon a corporation shall be made "'by 
delivering a copy to an officer or managing agent, or to any 
other agent authorized expressly or impliedly or designated by 
statute to receive service of summons. . . .'"  Derrick v. The 
Drolson Co., 69 N.W.2d 124, 127 (Minn. 1955)(quoting Rules of 
Civil Procedure 4.03). 
No. 
2004AP1877   
 
19 
 
McGrath was or was not a managing agent.10  As there is 
insufficient evidence in the record to apply the Carroll test to 
the facts in this case, we remand the issue to the circuit court 
to make such a determination.11 
                                                 
10 Similarly, we conclude there is insufficient evidence in 
the record to determine whether the fact that McGrath's position 
as branch manager bestowed on him the responsibility of ensuring 
compliance with state and federal securities laws, was of such 
nature that he possessed the general authority required to 
satisfy the definition of managing agent. 
11 Richards makes a secondary argument that McGrath was an 
"officer" 
of 
the 
corporation 
pursuant 
to 
Wis. Stat. § 801.11(5)(a).  Because the record and arguments 
concerning 
this 
issue 
are 
largely 
undeveloped, 
such 
a 
determination is properly one for the circuit court.  We thus 
remand that issue to the circuit court as well.  There is no 
claim that McGrath was a director of First Union. 
Although we do not decide this issue, we note that there is 
authority in Wisconsin that may be helpful to the circuit court 
in its determination of whether McGrath was an officer.   
An officer is "a person charged with important 
functions of management such as a president, vice 
president, treasurer, etc." Among the facts a court 
may consider are: (1) the individual's managerial 
duties; (2) whether the position occupied is one of 
authority; and (3) whether the individual possesses 
superior knowledge and influence over another and is 
in a position of trust. 
Modern 
Materials, 
Inc. 
v. 
Advanced 
Tooling 
Specialists, 
Inc., 206 Wis. 2d 435, 442-443, 557 N.W.2d 835 (Ct. App. 
1996)(internal citations omitted).  See also, e.g., Hyde v. Bd. 
of Comm'rs of Wells County, 198 N.E. 333, 337 (Ind. 1935)(in 
determining whether one is an officer or an employee, important 
tests include the tenure by which a position is held, whether 
its duration is defined by statute or ordinance creating it, or 
whether it is temporary or transient); Jefferson County v. Case, 
12 So.2d 343, 346 (Ala. 1943)(an officer is distinguished from 
an employee in the greater importance, dignity and independence 
of his position).   
No. 
2004AP1877   
 
20 
 
¶36 Furthermore, the court of appeals' majority held that 
First Union did not waive its right to challenge whether the 
circuit court had personal jurisdiction over it.  We are unable 
to hold, on the record before us, whether there was such a 
waiver as determined by the circuit court in its ruling.  First 
Union neither answered the complaint, nor made any appearances 
in the action prior to its motion to reopen and set aside or 
vacate the default judgment.12  Since the record is insufficient 
to determine whether or not there was such a waiver, we remand 
that issue to the circuit court for a determination.13  In the 
case 
before 
us, 
the 
circuit 
court 
determined 
that 
the 
                                                 
12 We acknowledge, without deciding, the fact that under 
certain circumstances, a motion to reopen and vacate a judgment 
pursuant to Wis. Stat. § 806.07 might be properly deemed waived 
because the motion was not filed within a reasonable time.  See 
Wis. Stat. § 806.07(2).  See also State ex rel. Cynthia M.S. v. 
Michael 
F.C., 
181 
Wis. 
2d 
618, 
627, 
511 
N.W.2d 
868 
(1993)("Determining whether motions under sec. 806.07(1)(h), 
Stats., have been made within a reasonable time requires a case 
by case analysis of all relevant factors.  This analysis should 
be guided by the fact that while respect for the finality of 
judgments 
is 
an 
important 
concern, 
the 
purpose 
of 
sec. 
806.07(1)(h) is to allow courts to do substantial justice when 
the circumstances so warrant."); EPF Corp. v. Pfost, 210 Wis. 2d 
79, 88-89, 563 N.W.2d 905 (Ct. App. 1997)(citation omitted)(In 
determining whether an application for relief complies with the 
"reasonable time" requirement of § 806.07(2), a court balances 
two competing factors: "the need for finality of judgments and 
the ability of a court to do substantial justice when the 
circumstances so warrant."). 
13 With regard to First Union's pending motion to strike 
those portions of Richards' brief that relate to the Eberle 
affidavit, we grant that motion to strike such portions, as well 
as the affidavit itself, since the affidavit and the arguments 
based on it were not before the circuit court at the original 
hearing on First Union's motion. 
No. 
2004AP1877   
 
21 
 
circumstances were not extraordinary, and therefore did not 
qualify for a ruling under Wis. Stat. § 806.07(1)(h).  The 
circuit court held the issue concerning defects in personal 
service was waived, apparently on the basis that First Union did 
not file its § 806.07 motion within one year of the date that 
the default judgment was entered.  We note that the one-year 
time period only applies to motions based upon § 806.07(1)(a) or 
(c).  Motions based on subsections (d)-(h) are subject only to 
the "reasonable time" standard.  See Wis. Stat. § 806.07(2).   
III 
¶37 We reverse the decision of the court of appeals.  We 
hold that the burden of proof is on the party seeking, pursuant 
to Wis. Stat. § 806.07, to set aside or vacate a default 
judgment, where the question of proper service is involved.  
Furthermore, we determine that the test set forth in Carroll is 
the appropriate one to determine who is a managing agent 
pursuant to Wis. Stat. § 801.11(5)(a).  We remand this case to 
the circuit court for further action consistent with this 
opinion, 
including 
evidentiary 
proceedings 
involving 
an 
application of the Carroll test, as well as providing an 
opportunity for a thorough review and explanation on the issue 
of whether the motion of First Union was timely, and whether 
McGrath was an officer, director, or managing agent of First 
Union.  Upon remand, the circuit court must make findings of 
fact and conclusions of law relating to the evidence that will 
be presented to it.   
No. 
2004AP1877   
 
22 
 
By the Court.— The decision of the court of appeals is 
reversed, and this matter is remanded to the circuit court for 
further action consistent with this opinion.   
 
 
 
No. 
2004AP1877   
 
 
 
1