WisBar News: Modified Rule Will Allow Default Judgments on Cross Claims and Counterclaims:

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  • WisBar News
    November
    02
    2018

    Modified Rule Will Allow Default Judgments on Cross Claims and Counterclaims

    Joe Forward

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    Default Judgment

    Nov. 2, 2018 – The Wisconsin Supreme Court recently approved a petition to modify Wisconsin’s default judgment rule, which currently allows a plaintiff to move for a default judgment against a defendant who fails to timely answer a complaint.

    Starting Jan. 1, 2019, parties who file counterclaims and cross claims will also be able to move for default judgments when an opposing party fails to timely answer.

    The Wisconsin Judicial Council in April 2018 petitioned the supreme court to amend Wis. Stat. section 806.02 in order to correct what it viewed as a “drafting oversight.”

    Attorney Tom Shriner, chair of the Judicial Council’s Evidence and Civil Procedure Committee, said it was likely an unintentional drafting error to expressly allow plaintiffs to move for default judgments on complaints against defendants without granting the same right when opposing parties fail to respond to counterclaims or cross claims.

    “There was no justification that anybody could think of as to why this authority should not be there,” said Shriner. Without express authority, however, the Judicial Council’s supporting memo noted appeals court decisions consistently holding that defendants cannot obtain default judgments on counterclaims or cross claims.

    For instance, in Pollack v. Calimag (1990), the court of appeals concluded that the defendant lacked standing to move for a default judgment on a counterclaim.

    The court noted that the statutes unambiguously allow a “plaintiff” to move for default judgments upon an unanswered complaint, but the statutes do not grant a commensurate right for cross claims and counterclaims that go unanswered.

    Under this rule change, judges will have express authority to grant default judgments when a party does not timely respond to a cross claim or counterclaim. For instance, section 802.06(1)(a) says parties have 20 days to answer counterclaims and cross claims, 45 days if the party is the state, state agency, or state employee or agent.

    “The rules already say you have to answer cross claims and counterclaims. The only thing is, currently there is no ability to enforce that requirement,” Shriner said.

    The new rule adds “counterclaim” and “cross claim” to Wis. Stat. section 806.02(2), allowing a “party” to move for judgment under a complaint, counterclaim, or cross claim “if the party against whom judgment is sought is in default for failure to join issue.”

    Shriner, along with Racine County Circuit Court Judge Eugene Gasiorkiewicz, testified in support of the petition at a public hearing Oct. 23. No party opposed the petition by appearance at the public hearing or through correspondence to the court. The supreme court issued a final order, adopting the rule modification, the same day (Oct. 23).

    The court noted that the new rule applies to proceedings commenced after the effective date, Jan. 1, 2019, “and to any proceedings within a court proceeding then pending, except insofar as, in the opinion of the circuit court, application of the rule change would not be feasible or would work injustice, in which event the former rule applies.”