Could default judgment rules be changing?

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Woody Allen once said, “80 percent of success is showing up.”

But for civil defendants in Wisconsin who fail to “show up” and answer a complaint on time, the consequence is often a default judgment.

To address this, Wisconsin Defense Counsel President Catherine M. Rottier is arguing for changes to Wis. Stat. 801.09(2) that would offer more leniency to defendants facing default.

“Right now, if you make a clerical mistake, your client could be stuck with a default judgment,” she said. “You can still contest damages, but not liability, even if you have the most wonderful defense.”

Rottier said plans to get legislators to support and draft changes are in their infancy. Any legislative changes would have to be approved by both houses and, ultimately, the governor.

Gass Weber Mullins LLC defense attorney Beth E. Hanan suspects that supporters may target attorneys in the Legislature.

“I think bringing it to lawyers in the Legislature might move the ball forward a little more quickly,” she said.

Defense attorneys charge that the current regime is unduly harsh.

Thomas J. Binder of Simpson & Deardorff SC called the statutes regarding default judgments “draconian” in nature.

Binder said at least once a year he has a client or a client’s insured who is faced with default, often because the person isn’t aware of the consequences of filing a response on time.

He recently had a case which involved a contractor who was named in a complaint and failed to answer, but turned out to have nothing to do with the accident.

Binder said the plaintiff’s attorney agreed to let his client out of the case. But the contractor could have just as easily wound up with a default judgment for something he was not even involved in, he noted.

“Certainly there are better ways for the state to approach a failure to respond to a timely summons and complaint,” Binder said. “Default is about as harsh as it gets.”

Limited recourse

In almost all cases, a defendant’s only means of avoiding default is to prove excusable neglect, which can be very difficult.

“That standard is not a negligence standard, but something more, and a lot depends on the trial judge you happen to be in front of,” Binder said.

Green Bay defense attorney Mark T. Budzinski recently had a case where a client accidentally e-mailed an answer to the incorrect address and ultimately missed the deadline by one day.

Budzinski, of the Corneille Law Group LLC, became aware of the situation a day after the deadline and promptly filed an answer, along with a motion claiming excusable neglect.

But the court denied the motion and entered a default judgment against his client.

“From my perspective, that is a situation where clearly there was no prejudice to anyone,” Budzinski said. “It was essentially a technical error that occurred, but the outcome was incredibly unjust when you look at all the circumstances.”

Binder said there are other circumstances which should warrant a finding of excusable neglect, such as when a defendant formally notifies the court and plaintiff of an extension request, or if an insured in an auto accident relies on an agent who fails to answer a complaint.

Defense lawyers hope that any change in the law would offer lesser penalties.

Binder suggested that alternate sanctions, such as monetary penalties or discovery sanctions, could be imposed in lieu of a default judgment.

And Rottier, of Boardman Suhr Curry & Field LLP, suggested looking to other states’ rules for guidance.

She said some states, including Iowa, in essence have a “second chance” provision that allows a 10-day reprieve.

“Maybe the Legislature doesn’t want to do something that generous,” Rottier said.

Whatever changes result, it will be important that they not impede the ability to move litigation through the courts in a timely fashion.

“The proper goal is to ensure that litigation moves along,” Rottier said. “But not in such a way that one miscue on the 46th day and a defendant loses all ability to contest a case with respect to liability.”