Court Opinion

ID: 9591692
Source: CourtListenerOpinion
Date Created: 2023-08-22 00:06:49.826597+00
Date Added: 2024-06-11T09:11:29.438083
License: Public Domain

NETTESHEIM, J.
Miro Tool & Mfg., Inc. appeals from a nonfinal order which granted Midland Machinery, Inc.'s motion to reopen a default judgment previously awarded to Miro.1 The trial court ruled that the one-year time limitation of § 806.07(2), Stats., was tolled because of certain representations made by Miro to Midland at a meeting in February 1994. Alternatively, the court held that Miro was estopped by its conduct from asserting the one-year limitation. Miro claims the trial court lacked authority to reopen the judgment after the one-year limitation period. We agree and therefore reverse the trial court's order.
BACKGROUND
The relevant facts are not disputed. In 1993, Midland ordered fixtures and tooling from Miro. On January 26, 1994, Miro served a summons and *652complaint upon Midland, seeking payment for the materials supplied. Because the parties' attorneys had previously been discussing the matter, Midland's personnel assumed that Miro's attorney would advise Midland's attorney that a lawsuit had been commenced. Therefore, Midland did not notify its attorney of the action. As a result, Midland did not appear in the action and on February 17,1994, the trial court awarded Miro a default judgment. Four days later, unaware that a default judgment had already been entered, Midland's attorney learned of the action and filed an answer. The answer alleged, inter alia, that the materials did not conform to the requirements of the purchase order and were not timely delivered.
On February 28, 1994, the parties met in an attempt to resolve their differences. During this meeting, Midland first learned that a default judgment had been awarded to Miro. According to an affidavit of Michael Ryan, a financial officer for Midland, Miro representatives advised Midland at this meeting that Miro would not pursue the default judgment and would, instead, seek to resolve the matter by negotiations. At this meeting, the parties agreed that the fixtures would be returned to Miro for testing to determine if they complied with the purchase order. Relying on this understanding, Midland took no immediate action to reopen or set aside the default judgment. Further negotiations between the parties proved fruitless.
On February 23, 1995, more than one year after the default judgment had been entered, Miro filed a garnishee summons and complaint against Midland and a banking institution. In response, on March 16, *653Midland filed a motion to reopen and vacate the default judgment. Midland relied on § 806.07(l)(h), STATS.2
Following a hearing on Midland's motion, the trial court issued the first of three decisions in this matter. The court denied relief to Midland under § 806.07(l)(h), Stats., ruling that Midland had not satisfied the extraordinary circumstances test of State ex rel. M.L.B. v. D.G.H., 122 Wis. 2d 536, 363 N.W.2d 419 (1985). However, the court ruled that Midland was nonetheless entitled to relief under subsec. (l)(a) of the statute which allows the court to relieve a party from a judgment on grounds of "mistake, inadvertence, surprise, or excusable neglect."
The trial court reasoned that the representations made by Miro to Midland at the February 28, 1994, meeting satisfied § 806.07(l)(a), STATS. The court's written decision stated:
[Tjhis assumption was an honest mistake by the defendants, the kind a reasonably prudent person might make. Indeed, from the court's perspective and from a professional standpoint, information about the lawsuit should have been provided to [Midland's attorney] as well as information concerning the request for the default judgment.... [T]he officers of [Midland] made an honest an [sic] erroneous assumption concerning the professional courtesies lawyers would extend to each other.
*654In response to this ruling, Miro moved for reconsideration. In support, Miro pointed out that relief under § 806.07(l)(a), Stats., must be sought within a reasonable time and, in any event, "not more than one year after the judgment was entered" pursuant to § 806.07(2). Noting that Midland's motion to reopen the judgment was brought beyond the one-year limitation, Miro asked the court to reverse its ruling.
In response, the trial court issued its second decision. The court first confirmed its earlier ruling that Midland had failed to meet the extraordinary circumstances test under subsec. (l)(h), but had satisfied the excusable neglect test under subsec. (l)(a). The court then addressed Miro's time limit argument. The court reasoned that Miro's conduct served to toll the time limits under § 806.07(2), STATS. Alternatively, the court held that Miro was estopped by its conduct from invoking the time limitations of the statute.
This ruling prompted Miro to seek further reconsideration. In support, Miro likened this case to Johnson v. Johnson, 179 Wis. 2d 574, 583, 508 N.W.2d 19, 22 (Ct. App. 1993), where this court held that the plaintiff had failed to demonstrate sufficient facts to estop the defendant from defending on the basis of a statute of limitations in a personal injury action. In its third decision, the court disagreed, ruling that Johnson actually supported the court's ruling. Miro appeals.
DISCUSSION
A motion to vacate a default judgment is addressed to the sound discretion of the trial court, and this court will not disturb the trial court's determination absent *655an erroneous exercise of that discretion. Baird Contracting, Inc. v. Mid Wis. Bank, 189 Wis. 2d 321, 324, 525 N.W.2d 276, 277 (Ct. App. 1994). Here, however, the controlling question is one of statutory construction: whether a trial court may grant relief pursuant to § 806.07(1)(a), STATS., when such motion is filed beyond the one-year time limitation of § 806.07(2). Statutory construction presents a question of law which we review without deference to the trial court's holding. Goff v. Seldera, 202 Wis. 2d 601, 617, 550 N.W.2d 144, 151 (Ct. App. 1996).
We have searched unsuccessfully for any authority which allows a trial court to extend the time limit imposed by § 806.07(2), Stats., when the grounds for relief are mistake, inadvertence, surprise or excusable neglect. Nór has Midland directed us to any such authority. Moreover, the language of the case law in other contexts suggests that the circuit court has no such power.
Prior to the adoption of § 806.07, STATS., in 1976, the statute governing relief from judgments, § 269.46(1), Stats., 1973, provided that:
The court may, upon notice and just terms, at any time within one year after notice thereof, relieve a party from a judgment, order, stipulation or other proceeding against him obtained, through his mistake, inadvertence, surprise or excusable neglect.... [Emphasis added.]
Construing this predecessor statute, the Wisconsin Supreme Court held that "[i]t is clear under sec. 269.46(1), Stats., that a court does not have the authority to open or vacate a judgment on the grounds enumerated in the statute if more than one year has passed after notice of the judgment to the party seeking *656relief." State ex rel. Green v. Williams, 49 Wis. 2d 752, 757, 183 N.W.2d 37, 40 (1971).
Following the adoption of the present statute in 1976, the Wisconsin Supreme Court has similarly reasoned that the one-year time limitation of § 806.07(2), Stats., "constitutes the maximum time allowed or a 'statute of limitations' period for bringing the motion to vacate on the grounds of mistake, surprise, inadvertence or excusable neglect." Rhodes v. Terry, 91 Wis. 2d 165, 171, 280 N.W.2d 248, 251 (1979); see also State ex rel. Cynthia M.S. v. Michael F.C., 181 Wis. 2d 618, 630-31, 511 N.W.2d 868, 873 (1994).
The trial court concluded that cases such as Johnson establish that a court may use estoppel to toll the time limits of § 806.07(2), STATS. However, those cases deal with classic statute of limitations governing the commencement of an action. See, e.g., Johnson, 179 Wis. 2d at 577-78, 508 N.W.2d at 20. We think it entirely proper to bar a party from invoking a statute of limitations defense when such party has contributed to the claimant's tardy filing.
Here, however, we deal with a time limitation for reopening a case already reduced to judgment. Regardless of Miro's role in this case, the hard facts remain that Midland allowed a default judgment to be taken against it and then allowed that judgment to endure for over one year before taking any remedial action.
Unlike statutes of limitations which govern the commencement of actions, requests for relief under § 806.07, STATS., invoke special policy considerations. That policy seeks to balance the competing values of finality against fairness in the resolution of a dispute. M.L.B., 122 Wis. 2d at 542, 363 N.W.2d at 422. The legislature has accomplished this task by setting one *657year as the maximum time for seeking relief under subsec. (l)(a).
If there be any question about this, § 806.07(l)(c), Stats., provides the final answer. This subsection allows relief in circumstances of fraud, misrepresentation or other misconduct of an adverse party. Such conduct will often (perhaps always) constitute grounds for estoppel. Yet, relief under this subsection is also governed by the one-year maximum limit set out in subsec. (2). Thus, in these most egregious of situations, the legislature has clearly set out a one-year time limit. But Midland's interpretation would have us toll the time limit in circumstances involving the less egregious circumstances under subsec. (l)(a). That, we conclude, would be an unreasonable interpretation of the statute.3
CONCLUSION
We conclude that the one-year maximum time limit set out in § 806.07(2), Stats., cannot be tolled or extended under any circumstances for purposes of relief under § 806.07(l)(a). We reverse the trial court's nonfinal order. We remand with directions to reinstate the default judgment.
By the Court. — Order reversed and cause remanded with directions.

 We have previously granted Miro's petition for leave to appeal the trial court's nonfinal order reopening the default judgment.

 Actually, Midland's motion did not identify the specific statutory basis for its motion, nor does the transcript of the motion hearing. However, the trial court's decision states that Midland relied on § 806.07(l)(h), STATS., the extraordinary circumstances provisions of the statute. Midland does not dispute this statement by the trial court, and we accept it.

 If Midland's rejoinder is that tolling should also apply to a "fraud, misrepresentation or other misconduct" situation, then the one-year limitation becomes meaningless since, as we have observed, estoppel would lie in nearly all such situations.