Oostburg State Bank v. United Savings

This is a review of a published decision of the court of appeals, Oostburg State Bank v. United Savings & Loan, 125 Wis. 2d 224, 372 N.W.2d 471 (Ct. App. 1985), reversing a default judgment and a decision and order of the Circuit Court for Sheboygan county, Honorable John Bolgert, circuit Judge, and remanding the matter for further proceedings. The decision and order denied United Savings & Loan Association's (Defendant's) motions to vacate and relieve it from the orders of January 11, 1984, striking its answer and granting Plaintiff's motion for default judgment; to extend the time in which to answer; and, to relieve it from the default judgment granted January 11, 1984, and entered January 18, 1984. The issue on review is: Did the Defendant serve its answer within the time limits prescribed by Oostburg State Bank (Plaintiff) in its letter terminating the courtesy agreement between the attorneys, thereby making it error for the trial court to grant the default judgment. We hold that the Defendant's answer was timely, and therefore, the trial court erroneously granted the default judgment. The material facts are undisputed. On September 29, 1983, Plaintiff filed and served Defendant with a summons and complaint alleging damages in the amount of $302,817.15. 1 On October 12, 1983, Attorney James O. Conway (Conway), one of the attorneys for the Plaintiff, received a telephone call from Attorney Thomas Klug (Klug). Klug informed Conway that his firm, Borgelt, Powell, Peterson and Frauen, S.C., had been retained by the Defendant and requested an extension of time to answer the complaint. Conway orally agreed to an extension, but no time limit was placed on the extension. Klug confirmed the oral agreement in a blind postscript to a letter received by Conway on October 15, 1983, which stated: We are in the process of preparing a responsive pleading to the Complaint in this matter. This will confirm our telephone conversation of October 12, 1983 at which time you were gracious enough to grant us a brief extension of time in which to responsively plead. (Emphasis added.) On November 30, 1983, a hearing was held on the motion of Plaintiff's bonding agent, Auto-Owners Insurance Company, to intervene in the lawsuit. Attorney Steven G. Mocarski (Mocarski), a member of Klug's law firm, appeared on behalf of the Defendant. At the hearing, Conway requested that Mocarski file Defendant's answer as soon as possible. Conway repeated this request in a letter to Mocarski, dated December 6, 1983, which stated, I would appreciate receiving a copy of your Answer as soon as possible. Subsequently, on December 15, 1983, Conway contacted Mocarski by telephone and requested that the answer be filed as soon as possible.