00-1100 Split Rock Hardwoods Inc. v. Lumber Liquidators Inc.

Listen to this article

“If and when a court is called upon to determine whether an answer has been filed “within a reasonable time after service,” the court should focus on the length of time between service and filing that allegedly amounts to unreasonable delay. The court should examine whether there are any factual circumstances that explain the delay, such as a problem with service, a need for verification of service, or the existence of a judicial stay.11 If no such factors are present, the court should consider whether the answer was filed within 45 days after service of the complaint-the statutory time limit for answering the complaint. In theory, a defendant could serve an answer upon the plaintiff the very day the complaint was served but not file the answer for another 45 days. Although it would be difficult to find a factual basis justifying the defendant’s delay in filing, a court would be hard pressed to impose a sanction upon a defendant who had a legal basis for delay-namely, compliance with the statutory time frame for answering the complaint.

“Finally, the court should consider whether the time period between service and filing is too insignificant to warrant any sanction. As a policy matter, the court should discourage technical objections in circumstances in which no sanction of any kind is warranted. …

“We agree that prejudice should be considered in determining the sanction, if any, for violation of the prompt filing requirement. As we explain below, prejudice must be considered and found before the court weighs default judgment as a sanction for failure to file promptly. As a practical matter, when the plaintiff moves to strike an answer to facilitate a default judgment for an alleged failure to file ‘within a reasonable time after service,’ the court may begin with an analysis of prejudice; if it is not present, there is no need to go back to determine the reasonableness of the filing, except as the basis for a lesser sanction. …

“In short, a circuit court may strike an answer if the answer is not filed within a reasonable time after service-but only in those circumstances in which the circuit court, exercising sound discretion, may enter default judgment.”

Reversed and remanded for further proceedings.

DISSENTING: Wilcox, J. “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.”

Bayfield County, Gallagher, J., Prosser, J.

Attorneys:

For Appellant: Michael S. Kreidler, Minneapolis, Minn.

For Respondent: Matthew F. Anich, Ashland