Cory Erdman v. General International Limited, General Motors Corporation and Zimbrick Automotive Group, Inc., et al.

1 BRIDGE, J. This case involves two consolidated appeals. In the first, Erdman appeals the circuit court's denial of his motion to compel discovery. We conclude that the circuit court did not err in granting a default judgment in Erdman's favor and in declining to reopen the judgment. Accordingly, we do not address Erdman's appeal. In the second, General Motors Corporation and Zimbrick Automotive Group appeal the circuit court's decision granting Erdman's motion for entry of default judgment against them for failure to file an answer to Erdman's amended complaint. They argue that their answer to the original complaint joined issue in the case so as to render a default judgment impermissible under Wis. Stat. § 806.02(1) (2005-06).[1] They argue further that the circuit court erroneously exercised its discretion in ruling that their failure to timely answer did not constitute excusable neglect; in denying their motion for an enlargement of time within which to answer; and in ruling that the default judgment should not be reopened under Wis. Stat. § 806.07(1)(h) due to extraordinary circumstances.

Background

2 Cory Erdman was involved in an automobile accident when the vehicle he was driving, a Chevrolet Beretta, struck a Chevrolet C/K pickup truck. He filed this action on August 5, 2005, alleging that the injuries he sustained in the accident were caused by design defects in the vehicles. His complaint set out claims for strict liability and negligence. General Motors Corporation and Zimbrick Automotive Group, Inc., timely answered the complaint denying liability. (Hereinafter General Motors and Zimbrick will be collectively referred to as GM.)

3 On February 6, 2006, Erdman moved to compel discovery. The circuit court denied the motion. Erdman petitioned for leave to appeal and we granted the petition.

4 On March 17, 2006, Erdman filed an amended complaint which alleged the same legal claims but added additional parties. GM filed an answer on May 18, 2006, five business days after it was due. Erdman filed a motion to strike General Motors' answer as untimely and for default judgment. Thereafter, GM moved for enlargement of time within which to file an answer. On October 18, 2006, the circuit court denied GM's motion for enlargement of time and granted Erdman's motion for default judgment. GM appeals, and we consolidated its appeal with that of Erdman. We reference additional facts as needed in the discussion below.

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6 Wisconsin Stat. § 802.06(1) requires a defendant to serve an answer within forty-five days of being served with the complaint. Time periods set by statute may be enlarged upon motion. See Wis. Stat. § 801.15(2)(a). However, "[i]f a motion is made after the expiration of the specified time, it shall not be granted unless the court finds that the failure to act was the result of excusable neglect." Id.

7 Excusable neglect "is conduct that ‘might have been the act of a reasonably prudent person under the same circumstances.'" Binsfeld, 272 Wis. 2d 341, 23. It is not synonymous with mere neglect, carelessness, or inattentiveness. Connor v. Connor, 2001 WI 49, 16, 243 Wis. 2d 279, 627 N.W.2d 182. The basic question is whether the conduct was excusable under the circumstances "since nearly any pattern of conduct resulting in default could alternatively be cast as due to mistake or inadvertence or neglect." Martin v. Griffin, 117 Wis. 2d 438, 443, 344 N.W.2d 206 (Ct. App. 1984) (citation omitted). The burden of establishing excusable neglect is on the party moving for the extension. Split Rock Hardwoods, Inc. v. Lumber Liquidators, Inc., 2002 WI 66, 50, 253 Wis. 2d 238, 646 N.W.2d 19.

8 GM first argues that default judgment is not permissible in this case. It points to Wis. Stat. § 806.02(1), which authorizes a court to enter a default judgment "if no issue of law or fact has been joined," and contends that under Snowberry v. Zellmer, 22 Wis. 2d 356, 126 N.W.2d 26 (1964),[2] issue is joined for the duration of a lawsuit once a defendant answers the original complaint and disputes any issue of fact or law. Hence, GM contends, because it disputed liability in its original answer, issue was joined without respect to any subsequent pleadings. We disagree.

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