Cruis Along Boats, Inc. v. Standard Steel Products Manufacturing Co.
Court: Wisconsin Supreme Court; February 4, 1964; Wisconsin; State Supreme Court
The appeal examines whether the trial court erred in refusing to vacate a default judgment against Kenosha Auto Transport, following a cross complaint by Standard Steel Products. Kenosha Auto Transport argues it demonstrated "excusable neglect" under sec. 269.46(1) of the Wisconsin Statutes, citing several reasons: the lead attorney was overwhelmed with trial work, believed the main case would not go to trial soon, the answer was only eight days late, and the judgment resulted in an unjust award of $4,000 instead of the actual damages of $395.
However, the court noted that previous rulings established that busy schedules do not constitute excusable neglect warranting relief. The trial judge emphasized a lack of evidence that the attorney was unable to communicate with opposing counsel, file necessary documents, or seek an extension, despite being engaged in other trials. The appellant's reference to McArthur v. Slauson was deemed irrelevant since it pertained to trial responsibilities rather than procedural matters like timely filings. Ultimately, the attorney's assumption about the trial timeline did not excuse the failure to meet the twenty-day deadline to respond to the cross complaint, reinforcing that the responsibility for timely action lies with the attorney regardless of perceived urgency.
The appellant argues that the late service of their answer, being only eight days late and followed by an eleven-day interval before applying to vacate the default judgment, should be considered excusable neglect. Relevant case law indicates that prompt action by a defaulting party is significant in determining the excusability of neglect. If the appellate court were a trial court, it would have granted the appellant's motion to vacate the judgment. However, the trial court has broad discretion under Section 269.46 (1) of the Stats, and it cannot be established that failure to grant relief in every instance of neglect followed by prompt action is an abuse of discretion.
The court must consider elements such as potential excessive damages awarded and the prevention of a miscarriage of justice. Testimony revealed that a luxury boat was damaged in transit, leading to a claimed loss in market value of $4,000, attributed to the damage affecting its appeal, particularly for resale. In contrast, the appellant asserted repair costs of only $395, indicating the distinction of this case from typical scenarios where property is purchased for personal use rather than resale. Thus, the court upheld the trial court's measure of damages based on loss in market value.
Additionally, the appellant cites Paschong v. Hollenbeck, which establishes that an attorney's mistake should not automatically penalize the client in seeking relief for excusable neglect. The higher court affirmed that a trial court's discretion is not limited to a single outcome when considering remand cases.
The trial court did not abuse its discretion in denying the application to vacate the judgment. The appellant failed to demonstrate that its default resulted from excusable neglect and did not comply with the requirement to establish a meritorious defense through an affidavit or verified answer. The trial judge acknowledged that an affidavit is not necessary if supported by a verified answer, yet the appellant’s affidavit was insufficient as it was based on information and belief. The proposed answer was also deemed inadequate, as its denials were similarly based on information and belief without proper verification from someone with personal knowledge. The court emphasized that an affidavit must state that the affiant has fully informed their attorney about the case and has been advised of a valid defense. The appellant's counsel’s affidavit did not satisfy these criteria. Consequently, the court affirmed the order. The statute allows relief from a judgment obtained through mistake, inadvertence, surprise, or excusable neglect within one year, but the appellant did not meet the requirements for such relief.
