June 11, 2024 – A motion for relief from two default judgments was not timely when it was filed seven months after entry of the judgment, the Wisconsin Court of Appeals (District II) has ruled in an unpublished opinion, Par, Inc. v. McCahey, 2023AP11 (May 22, 2024).
Par, Inc. (Par) filed a small claims action against Suzan McCahey in Waukesha County in March 2020. McCahey, representing herself, filed an answer to Par’s complaint.
After Par served McCahey with a set of written discovery requests, Attorney Robert Malloy filed a notice of retainer on McCahey’s behalf.
Flurry of Motions
Par filed multiple motions seeking discovery from McCahey.
Jeff M. Brown , Willamette Univ. School of Law 1997, is a legal writer for the State Bar of Wisconsin, Madison. He can be reached by
email or by phone at (608) 250-6126.
The circuit court granted two of the motions – a motion to compel discovery and a motion for sanctions, based on McCahey’s failure to comply with an order compelling discovery.
In August 2011, the circuit court granted Par’s motion to file an amended complaint and ordered McCahey to respond to the complaint within 45 days.
Default Judgment
McCahey failed to respond to the amended complaint. Par filed a motion for default in October 2021, and the circuit court granted the motion in December 2021.
The circuit court entered a default judgment in favor of Par on the claim that it had added in the amended complaint. The court also granted Par’s motions for discovery sanctions.
Second Default Judgment
Par then filed a second motion for sanctions, based on McCahey’s failure to comply with scheduling and discovery orders.
Then, in February 2022, the circuit court granted a second Par motion for default judgment and awarded Par $30,000 in damages and $12,625 in costs.
The circuit court also awarded Par $4,895 in discovery sanctions. Par served McCahey with a notice of entry of judgment on Feb. 24, 2022.
New Attorney
McCahey hired a new attorney, who filed a notice of retainer on June 8, 2022.
On Sept. 15, 2022, McCahey filed a motion for relief from the two default judgments on the grounds of: 1) excusable neglect, under Wis. Stat. section 806.07(1)(a); and 2) extraordinary circumstances under section 806.07(1)(h).
McCahey filed a reply brief in which she raised a new argument.
The circuit court granted Par’s motion to strike the new argument in McCahey’s brief. The circuit court also denied McCahey’s motion for relief, after finding that she hadn’t filed the motion for relief from the default judgments within a reasonable time.
Untimely Motion
The Court of Appeals began its per curiam opinion by noting that section 806.07(2) requires a party to file a motion for relief from judgment “within a reasonable time, and, if based on sub. (1)(a) or (c), not more than one year after the judgment was entered.”
McCahey argued that her motion for relief from judgment was timely because it was filed within one year of the judgment being entered.
But the Court of Appeals explained that the Wisconsin Supreme Court has held that the fact that a party files a motion for relief from judgment within a year of the judgment being entered doesn’t mean the motion was timely filed.
McCahey also argued that her motion was timely because she acted as soon as she practically could. In support of that argument, McCahey pointed to alleged deceit by Malloy.
The Court of Appeals noted that the circuit court had pointed out that McCahey had waited more than a month after learning of the judgments to hire another attorney.
“We see no argument from McCahey regarding the circuit court’s observation that McCahey waited a ‘long time’ to take action,” the Court of Appeals wrote.
Unnecessary Delay
Regarding the three months that her new attorney waited to file a motion for relief from the default judgments, McCahey argued the delay was necessary because she had to obtain her files from Malloy.
The circuit court had pointed out that McCahey had the necessary information, and that the same information could have been obtained from the court’s docket.
The Court of Appeals concluded that the circuit court’s basing the denial on that reasoning was not an erroneous exercise of discretion, especially given that McCahey had conceded at oral argument “that ‘even we would agree that it started becoming unreasonable that we hadn’t filed anything.’’
No Excusable Neglect
The Court of Appeals also concluded that the circuit court hadn’t erroneously exercised its discretion by concluding that McCahey failed to demonstrate excusable neglect.
McCahey argued that her failure to comply with the circuit court’s orders were Malloy’s fault.
But the Court of Appeals noted that McCahey failed to point to anything in the record that showed that she’d: 1) acted reasonably and prudently when she hired Malloy; or 2) made a reasonable inquiry about the proceeding.
McCahey argued that the circuit court should have evaluated whether she had a meritorious defense.
But the Court of Appeals explained that whether McCahey had a meritorious defense was irrelevant absent a finding of excusable neglect.
“Because the circuit court determined that McCahey failed to establish excusable neglect, it was not required to take the additional step of determining whether McCahey had a meritorious defense,” the Court of Appeals wrote.
Local Rule Irrelevant
The Court of Appeals concluded that McCahey had failed to show she was entitled to relief “for any other reason justifying relief” under section 806.07(1)(h).
The circuit court denied McCahey relief under section 806.07(1)(h), finding that she’d abandoned the argument after filing her opening brief in support of her motion for relief.
McCahey argued that her reply brief was allowed under a local rule.
“Regardless of whether the local rules permitted McCahey to reply brief at all, the local rule on which McCahey relies has no bearing on the issue of fundamental fairness that raises when a moving party raises a new argument for the first time in its reply brief,” the Court of Appeals wrote.
