Court Opinion

ID: 9518630
Source: CourtListenerOpinion
Date Created: 2023-08-07 00:57:46.819797+00
Date Added: 2024-06-11T12:29:40.532130
License: Public Domain

¶ 70. JON E WILCOX, J.
(dissenting). The majority acts "reluctantly" because, even though it recognizes that the circuit court correctly held that Lumber Liquidators did not file its answer within a reasonable time, and it recognizes that the circuit court has the discretion to grant default judgment, the majority still manages to come to the conclusion that the circuit court reached the wrong result. While I agree that the remedy of default judgment is generally disfavored, it is a remedy that, according to the plain language of the statutes, still falls squarely within the discretion of the circuit court. In this case, I cannot find that the circuit court erroneously exercised its discretion, and for that reason I dissent.
¶ 71. When interpreting a statute, we first look to its plain language. Landis v. Physicians Ins. Co., 2001 *274WI 86, ¶ 14, 245 Wis. 2d 1, 628 N.W.2d 893. If the language of the statute is clear and unambiguous, we do not look beyond the statutory language to ascertain its meaning. Id.
¶ 72. Wisconsin Stat. § 801.14 (1999-2000)1 is clear in its requirements. Subsection (1) requires that "Every ... pleading .. . shall he served upon each of the parties." Subsection (4) adds that:
All papers after the summons required to be served upon a party ... shall be filed with the court within a reasonable time after service. The filing of any paper required to be served constitutes a certification by the party or attorney effecting the filing that a copy of such paper has been timely served on all parties required to be served, except as the person effecting the filing may otherwise stipulate in writing.
¶ 73. These statutory subsections, read together, make it apparent that two steps are required for the effective service of a pleading: (1) the pleading must be served on every party; and (2) the document must then be filed with the circuit court within a reasonable time, thereby certifying that all parties required to be served have been timely served with the document. Ness v. Digital Dial Communications, 227 Wis. 2d 592, 601, 596 N.W.2d 365 (1999). These steps are mandatory, as indicated by the use of the word "shall" in each subsection. Cmty. Credit Plan, Inc. v. Johnson, 228 Wis. 2d 30, 41, 596 N.W.2d 799 (1999). The language of the statute is unambiguous in these respects.
¶ 74. In this case, the parties do not dispute that the answer was served on Split Rock in a timely manner. Thus, the only questions that remain pertain *275to the filing of the answer and the remedy for failure to file the answer in a timely manner. Specifically, this court must decide (1) whether the filing was made in a reasonable time, (2) whether the circuit court had the discretion to strike the answer and grant default judgment, and (3) if so, whether the circuit court erroneously exercised that discretion.
¶ 75. The majority correctly decides that the circuit court did not erroneously exercise its discretion when it found that the defendant failed to file its answer within a reasonable time. Majority op. at ¶ 34. Having already received a courtesy extension from Split Rock, Lumber Liquidators was well aware that its answer had to be served by December 22,1999. Lumber Liquidators actually served the answer a day earlier. Lumber Liquidators should have been equally aware that the answer had to be filed with the court within a reasonable time after the service was made, and yet it failed to do so for 45 days. This was after Split Rock had filed its motion to strike the answer. Additionally, Lumber Liquidators never made a motion to extend time to file under Wis. Stat. § 801.15(2)(a).2 Under such circumstances, the circuit court did not err when it held that Lumber Liquidators' answer was not filed within a *276"reasonable" time.3 As a consequence, Lumber Liquidators failed to meet the requirements of § 801.14.
¶ 76. Our next questions are whether the circuit court had the discretion to strike the pleading and grant default judgment as a remedy for the failure, and, if the circuit court had such discretion, whether the circuit court erroneously exercised it.
¶ 77. The first question is easily answered. We have long held that the decision of whether or not to enter a default judgment is a matter that is within the sound discretion of the circuit court. See, e.g., Evelyn C.R. v. Tykila S., 2001 WI 110, ¶ 18, 246 Wis. 2d 1, 629 N.W.2d 768; Oosiburg State Bank v. United Sav. & Loan Ass'n, 130 Wis. 2d 4, 11, 386 N.W.2d 53 (1986); Holling-sworth v. Am. Fin. Corp., 86 Wis. 2d 172, 181, 271 N.W.2d 872 (1978); Willing v. Porter, 266 Wis. 428, 430, 63 N.W.2d 729 (1954). We will only reverse a circuit court's grant of default judgment in a situation where the circuit court erroneously exercises that discretion, such as when circuit court applies an incorrect legal standard in deciding whether to enter judgment. Oost-burg, 130 Wis. 2d 4, 11-12.
¶ 78. The question of erroneous exercise thus turns on the underlying question of whether the circuit court properly struck Labor Liquidators' answer when it was not filed within a reasonable time. I am unable to find any statutory provision that would have forbidden it from doing so. Quite the opposite, in fact, Wis. Stat. § 805.03 states that:
*277For failure ... of any party to comply with the statutes governing procedure in civil actions... 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).
Among the orders in Wis. Stat. § 804.12(2)(a) is:
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.
Taken together, these statutes plainly give the circuit court the discretionary authority to strike a pleading or to grant default judgment if, in the court's discretion, such a remedy is appropriate for a party's violation of the rules of civil procedure. In the present case, Lumber Liquidators violated the rules of civil procedure and the court imposed a sanction it was authorized by statute to impose. Thus, the circuit court did not apply an incorrect legal standard.
¶ 79. The only way the majority is able to find that the circuit court erroneously exercised its discretion here is by grafting a prerequisite finding of prejudice onto the court's discretion. By requiring that the circuit court find that the failure to file within a reasonable time.was prejudicial before it may strike the pleading, majority op. at ¶ 58, the court adds a mandatory element that is plainly not mandatory under the statute. While I agree that the factors cited by the majority — including prejudice — should influence the circuit court's reasoning in exercising its discretion, there is no statutory requirement for a finding of prejudice.
*278¶ 80. There are also practical reasons for not requiring a showing of prejudice in a situation such as this. The failure to file a pleading, as opposed to the mere failure to serve a pleading, has a significant impact on the judicial process and on the administration of justice as a whole. That is, the failure to file a pleading within a reasonable time greatly affects the court's ability to manage its own calendar and to conduct efficient proceedings. Thus, the failure to file a pleading within a reasonable time may actually "prejudice the court" more than it prejudices the opposing party, and could have an impact not only on the parties involved, but on parties in other cases currently being heard by the same court. Furthermore, under the majority's reasoning, a pleading that is timely served but not filed with the court until months or even years later would still require the non-dilatory party to go in front of the court and demonstrate prejudice, a situation that strikes me as unreasonable. These practical concerns reinforce my conclusion that the remedy for a failure to file — including a grant of default judgment— belongs with the discretion of the circuit court.
¶ 81. Again, I recognize that default judgment is an extreme remedy, and one that is generally not favored. Rhodes v. Terry, 91 Wis. 2d 165, 177, 280 N.W.2d 248 (1979) (citing Dugenske v. Dugenske, 80 Wis. 2d 64, 68, 257 N.W.2d 865 (1977)). But despite its disfavored status, default judgment is not a prohibited remedy under the circumstances of this case. The discretion to grant default judgment lies clearly with the circuit court, and the circuit court applied the correct legal standard here. Thus, I am unable to conclude that the circuit court erroneously exercised its discretion in this case. For that reason, I disagree with *279the holding of the majority, and I would uphold the judgment of the circuit court.
¶ 82. For the foregoing reasons, I dissent.
¶ 83. I am authorized to state that Justice N. PATRICK CROOKS joins this opinion.

 All subsequent references to the Wisconsin Statutes are to the 1999-2000 version unless otherwise indicated.

 The majority tries to nullify Wis. Stat. § 801.15(2)(a) by suggesting that the "reasonable time" under Wis. Stat. § 801.14(4) is not a "specified time" under § 801.15(2)(a). Majority op. at ¶¶ 20, 48-49. This adds little to the analysis. If Lumber Liquidators had an excuse to file the pleadings after what would be considered a "reasonable time," it could have easily sought leave from the court to do so — it did not. If there was no excuse for Lumber Liquidators to file late, it then should have filed the pleadings promptly after service, which is both the intent of the statute, and the general practice in litigation.

 I further note that, although I generally agree with the factors that the majority considers in making its determination of reasonableness, majority op. at ¶¶ 26-28, I would emphasize that the factors listed are not all-inclusive, and that the determination of reasonableness must be made on a case-by-case basis.