It Happens to the Best of Us: Avoiding and Mitigating Defaults
Erik J. Pless and Alicia M. Stern, One Law Group S.C.,
and Kristen S. Scheuerman, Weiss Law Office, S.C.

At some point in every defense attorney’s career there will inevitably be a moment of panic when the realization hits that an answer to a complaint has not been filed in a timely fashion. This moment of panic may be self-inflicted, or it could be the result of a client error. Regardless of the cause for panic, the attorney must, when faced with this inevitable circumstance, efficiently develop a strategy for mitigating the default and implement that strategy as promptly as possible to avoid the worst consequences. 

In civil cases, the defendant must file an answer within forty-five days if an insurer is named as a defendant or if the action is based in tort.[1] In other civil cases that do not involve tort claims or an insurance company defendant, the answer is due within twenty days.[2]

When faced with the realization that a timely answer has not been filed, as indicated at the outset, the most important thing to do is develop a plan, and then implement that plan accordingly.

I.              Developing and Implementing a Plan

Step 1: Analyze the situation. The first step in developing a strategy for mitigating a default is to accurately assess the situation. Start by asking the following questions:

• Was this answer due within forty-five days or twenty days?
• When was the defendant or defendants served? Based on the dates of service, calculate when the answer was due and then determine how many days a default situation has been ongoing. Keep in mind that under Wisconsin law, “the day of the act … from which the designated period of time begins to run shall not be included,” but “[t]he last day of the period so computed shall be included.”[3] Use a reliable calendar calculator that takes in to account things like leap year to ensure you determine the precise deadline.
• Check CCAP and determine whether a motion for default has been filed and, if so, when that motion was filed.
  • If a Motion for Default Judgment has been filed, is there a hearing scheduled? Who is the Judge assigned to the case?
  • If a Motion for Default Judgment was filed, has the court already granted default judgment, and if so, when?
  • Determine whether there are any other parties in the case that are aligned in interest and further determine whether those parties have already filed an answer. 

Step 2: Ascertain what happened and why. After the defendant was served, where did the pleading go and who was notified of the litigation? Start to document this information so you can begin to formulate an explanation as to how the answer failed to be filed in a timely manner. When investigating the initial response to service, consider trying to determine whether there was a deviation from the otherwise standard course of practice when new complaints are received. Keep in mind that this is not an exercise in assessing blame. Rather, this is an analysis of what happened and why so that you can formulate an explanation that could explain to a court how “excusable neglect” was the cause for the untimely filing. Understanding the cause of the failure could also potentially prevent any such issues in the future.

Step 3: Ascertain whether there has been any prejudice to the plaintiff or plaintiff’s attorney. Obviously, the shorter the time between a missed answer deadline and the answer’s ultimate filing, the less likely there will be any prejudice and the less likely a default judgment would actually be entered. However, if you find yourself in a situation where there is a more significant period of time between when the answer should have been filed and when you are discovering the error, consider whether other deadlines passed related to the litigation (such as a scheduling conference or possible disclosure deadlines). You will also want to quickly assess whether any substantive discovery has been conducted in the case since the missed deadline. 

Step 4: Formulate a remediation plan. At the risk of misusing a legal term of art, if you have missed a deadline to file an answer, time is of the essence. Consider how quickly can responsive pleadings be filed? Is opposing counsel an attorney with whom you have worked in the past and are comfortable asking for an extension? Regardless of the level of comfort with the plaintiff’s attorney, immediate remedial steps need to be taken to mitigate any prejudice and avoid a default judgment being entered. This is important because the legal standard for seeking an enlargement of time is different than the legal standard for vacating a default judgment. 

So, the deadline for filing an answer has passed. First, responsive pleadings should immediately be drafted and filed. A notice of appearance, answer, and a motion to enlarge the time within which to answer should be filed the same day a missed deadline is discovered or as soon as reasonably possible thereafter.

Second, call the plaintiff’s attorney and ask for an extension. If your extension is granted, no harm has been done (aside from the anxiety and stress you undoubtedly endured). If an extension is granted, confirm the extension with the plaintiff lawyer in writing and immediately notify (and relieve) your client. If counsel does not agree to an extension, send an email to opposing counsel confirming that an extension was requested and the request was denied. Following a rejected extension request, defense counsel should immediately begin formulating a strategy to establish excusable neglect on the part of the insurer, insured, attorney, or law firm involved.

As suggested earlier, it is very important to ask your insurance company client what the normal standard procedure is concerning new litigation and why, in this case, the standard procedure did not result in a timely transmission to defense counsel for answering (assuming a delay in transmission was a part of the cause for missing the deadline). Hopefully, there will be an unusual circumstance that will rise to the level of excusable neglect. To successfully argue that excusable neglect was the cause for the missed deadline, counsel will need to have a thorough understanding of the law as it relates to defining that term. Generally, any unusual or “out of the norm” situation could be the basis for excusable neglect. It is almost certain that your busy schedule or the amount of work on your desk distracting you from a deadline will not be considered excusable neglect. In reviewing the existing body of law as it relates to the concept of “excusable neglect,” it is clear that there needs to be some reason for the missed deadline beyond a busy and demanding practice that a court can cite as a reason to grant a motion to enlarge time.

After you have discussed with your client their standard procedures for handling new lawsuits, an affidavit should be drafted for signature by someone at the insurance company or the defendant’s business explaining the standard procedures and further explaining why or how those procedures failed in this particular instance.

II.            What is Excusable Neglect?

Our courts have considered the following instances of neglect to be excusable: health conditions that interfere with timely work, children’s issues, unusual parental responsibilities, a family emergency or a work emergency (such as glitches and unforeseen issues arising out of the implementation of file management software). “Clerical error” can also potentially be the basis for a finding of excusable neglect but proceed with caution if this is the grounds for your delay. Setting the law aside for just a minute, blaming support staff for missed deadlines is generally a poor excuse for an attorney’s failure to uphold his or her own professional responsibilities. And yet we are all human and all equally fallible, so mistakes are made. Whether a clerical error or support staff misstep rises to the level of excusable neglect is a matter of discretion for the court.

Wisconsin law concerning default judgments is found in section 801.15, which provides as follows:

When an act is required to be done at or within a specified time, the court may order the period enlarged but only on motion for cause shown and upon just terms … If the motion is made after the expiration of the specified time, it shall not be granted unless the court finds that the failure to act was the result of excusable neglect.[4]

Statutory language aside, our courts have held that an enlargement of time to serve and file an answer is not a favor to be granted to a litigant as a matter of grace.[5] A party’s neglect, carelessness, or inattentiveness is not “excusable neglect.”[6] Further, it is not enough that the failure to timely file an answer be unintentional or inadvertent, since nearly any pattern of conduct resulting in default could be cast as due to mistake or inadvertence or neglect.[7] Further, the purported existence of a meritorious defense has no bearing on whether the neglect was excusable and is insufficient by itself to entitle a defaulting party to relief.[8]

Our courts have considered various “clerical errors” and concluded the same constituted excusable neglect under the following specific fact patterns:

1. a.     The Casper Case

Excusable neglect was found when an insurance company (National Union) failed to timely answer an amended complaint. When the amended complaint was received in a division office, counsel determined the amended complaint needed to be handled and answered by counsel out of another department. She followed “specific procedures to administer and coordinate the handling of legal documents” but apparently USPS lost the document and it was never delivered to the other department. In holding that this clerical error constituted excusable neglect, the Casper court explained that, “it appears that despite the carefully structured process to assure timely answers to the legal process … and they have a process that attempts to assure timely answer to the legal process … the correspondence was lost.”[9]

1. b.    The Royal Insurance Case

Royal failed to Answer timely and demonstrated that a clerical error inadvertently caused the Complaint to be attached to its pre-suit file, which was then sent off for duplication. When the file returned, the Complaint was immediately noted and an Answer was filed within 24 hours of the discovery.[10] 

Wisconsin law is also fairly clear on what is not “excusable neglect.” Our courts have expressly held that “[s]ummer vacations and heavy workloads do not provide, in and of themselves, a sufficient excuse for missing statutory deadlines.”[11] The press of other business does not amount to an excuse for failing to meet a statutory deadline.[12] Confusion about forwarding papers from one office to another due to reorganization is not excusable neglect.[13] A lawyer who misplaced a client’s file while relocating his law office and thus missed a statutory deadline was not forgiven for excusable neglect.[14]

In another matter resulting in a similar holding to Dugenske, a substantial, sophisticated bank that had a “well-established” procedure for the orderly and timely handling of lawsuits failed to timely file, resulting in default judgment and the bank claimed that the summons and complaint were lost in transit after it changed the address for its legal-processing department.[15] However, the court was not satisfied that this constituted excusable neglect. The court considered that prior to the lawsuit being filed, the bank had been contacted by the Plaintiff’s attorney, and that even after service, the Bank was sent letters regarding the lawsuit.[16] The court concluded that there was no reason to believe that the bank’s “established procedures” would not have at least alerted them to the fact a suit was imminent or why the “established procedures” could not accommodate a routine address change.[17] The Mohns case is one of the reasons we have emphasized having a thorough understanding of your client’s standard procedures and to further determine, with precision and specificity, what kind of break down occurred to lead to the missed deadline.

Mohns is not the only example we have of some sort of procedural breakdown not rising to the level of excusable neglect. A similar result was reached by the Leonard court when it failed to enlarge the time for filing when a lawsuit was routed to an accounting department and then not answered.[18] In Leonard, DuPont Mutual Insurance Company (“DuPont”) received the Plaintiffs’ lawsuit and then forwarded the Complaint to its adjuster, Wisconsin Adjusting Service (“WAS”).[19] A WAS claims manager received the file and sent it to an accounting department for payment of an invoice, with instructions to return the file to the claims adjuster; nothing was said about when the adjuster needed the file back. Id. The file was not returned before the Answer was due and a default judgment against DuPont for its failure to timely answer was granted.[20] 

In upholding the default judgment and refusing to find “excusable neglect,” the court of appeals focused on the fact that DuPont had no established procedure in place to ensure a timely return of legal documents.[21]

A clerical error may constitute excusable neglect. We agree; but, here, there was no showing of unintentional misplacement. Rather, the Leonard/Conley file was intentionally sent to the accounting department without any established procedure to ensure a timely return. This was not a “clerical” error. DuPont and its agent were aware of the complaint and of the need to file a timely answer. WAS offered no explanation of why its accounting department failed to send the file back to the insurance adjuster, and the only reason the adjuster offered for failing to check on the file was that he was busy.[22]

III.          Has a Default Already Been Granted?

Wisconsin law concerning excusable neglect prior to default judgment being rendered is very different from Wisconsin law concerning relief from an existing default judgment. Prior to the grant of a judgment, the standard utilized by the circuit court is one of “excusable neglect” as evidenced by the language found within section 801.15. However, the law concerning relief from default is far less forgiving. Under current Wisconsin default jurisprudence, a circuit court may exercise judicial discretion to grant relief from an existing default when – in weighing the correct balance to strike between finality and fairness – the circuit court determines that “extraordinary circumstances” are present.[23] A circuit court weighing this balance in an exercise of its discretion applies a five-factor analytical framework – based on section 806.07(1)(h) but known colloquially as the Miller factors – to determine whether to grant relief:

(1)  Character of the litigant’s choices: Whether the judgment was the result of the conscientious, deliberate and well-informed choice of the party seeking relief;

(2)  Effective assistance of counsel: Whether the party seeking relief received the effective assistance of counsel;

(3)  Finality and merits considerations: Whether relief is sought from a judgment in which there was no judicial consideration of the merits and the interest of deciding the particular case on the merits outweighs the finality of judgments;

(4)  Meritorious defense: Whether there is a meritorious defense to the claim; and

(5)  Inequity in granting relief: Whether there are intervening circumstances making it inequitable to grant relief.[24]

The party seeking relief from an existing default bears the burden to prove that the conditions for granting relief exist.[25] Sharp (perhaps some would say unethical) practitioners may attempt to mislead a court into using the Miller factors prior to a default judgment being rendered but that is certainly not advisable. When defending a motion for default judgment, practitioners should take particular care to inform the court of the proper standard for reviewing the motion and distinguish the standard for vacating a default judgment from the required to enlarge time prior to a default judgment. 

Consider the following scenarios:

Scenario #1: A new client calls in a panic just realizing that a two-month-old complaint has just been “found” on the adjuster or claim attorney’s desk. Default judgment has not been granted but a motion for default has already been filed by the plaintiff’s attorney. Both the insurer and the insured have been served and the answer is two weeks overdue.

This scenario probably does not rise to the level of “excusable neglect” absent some compelling explanation of why the complaint was “lost” on the desk of a person responsible for ensuring that the complaint gets answered in a timely fashion. Typically, a family emergency would be the only compelling explanation.

Scenario #2: An attorney calls you seeking your help in getting out of a default judgment that was entered against a client of his. She explains that she was on vacation when suit was filed and the client dropped it off at her office. The next day the attorney’s sole paralegal broke his leg and required emergency surgery. Later that week, a temporary worker who was filling in and answering phones did not understand the significance of the complaint and simply filed it away in the client’s file. Two months later, the client calls irate after being mailed a copy of a default judgment.

This scenario almost certainly rises to the level of excusable neglect. A medical emergency involving the person responsible for proper handling of the complaint rarely would be considered “inexcusable.”

Scenario #3: In an (alleged) seven-figure litigation with several dozen pleadings and several parties, an amended complaint is not answered by an attorney actively defending the case. Months go by during which time multiple depositions are taken and all parties proceed as normal –as if the amended complaint were answered in a timely fashion. Several months after the failure to answer, the plaintiff’s attorney realizes that no answer was filed and files a motion for default judgment complete with supporting brief and affidavit establishing the defense attorney’s professional “impeccable credentials,” experience and accomplishments and that of his State Bar of WI Certified Paralegal together with a copy of a published case in which the defense attorney advocated the importance of the timeliness of pleadings as well as an article written by the defense attorney concerning case law on the consequences of default. Both the attorney and the paralegal erroneously thought the answer had been timely filed. The only explanation was a highly unusual business emergency involving law firm management that affected both the attorney and paralegal.

This scenario rises to the level of excusable neglect despite the “press of business” situation. No prejudice could be shown by the plaintiff in a failure to answer an amended complaint and the case progressing as normal.

Scenario #4: The complaint has been transmitted with file materials to defense counsel on a timely basis. Defense counsel has weeks to draft the answer. She drafts responsive pleadings. They sit on her desk in rough form waiting to be revised and sent out after review by the insured and adjuster. The insured and adjuster never get back to her with input about the draft answer. New work comes in. A different case suddenly increases in value after a new expert report comes in. An IME deposition goes poorly causing a re-evaluation. An associate attorney has a problem in a case that requires attention. Clients are asking for reports on files. The answer gets buried on her desk under discovery responses that can wait. She discovers that an answer was due ten days after it should have been filed. She and the plaintiff attorney have a historically contentious relationship. 

This probably would not rise to the level of excusable neglect as the normal press of work is typically not enough to be considered “excusable.” 

IV.          A Paralegal’s Perspective

In working for busy civil litigators with heavy caseloads, managing deadlines for even one attorney can be overwhelming. Between discovery requests and adhering to scheduling order deadlines, some days a paralegal can find themselves spending every minute available just making sure that all the deadlines for the day are accounted for and met.

In an insurance defense or civil litigation defense practice, one of the most important deadlines is answering a complaint. Using a multi-method way of making sure that the complaint gets answered may seem redundant, but it is always better to be safe than sorry. A little extra work on the backend can prevent even more work later. When a new file comes in for representation, the first thing to be conducted is a conflict check to make sure that the firm can accept the case. At the same time, it is important to find out when the potential client(s) was/were served with the complaint. Knowing the date of service allows you to calculate when the answer must be filed. 

Once a conflict check is cleared and the answer deadline is determined, in most practices, putting that deadline on the handling attorney’s electronic calendar is the first thing that should be done. Keep in mind that each practice needs to create a system that works for the nuances of the attorneys and staff involved. For example, some attorneys do not use a computer so perhaps a deadline needs to be added to a physical desk calendar. If you are using an electronic calendar, adding deadlines and assigning a category color, such as red or another color that stands out, can also be helpful in drawing attention to the deadline as it approaches.

Simply calendaring the deadline, though, is not enough. Ensure you have reminders set in advance of the deadline; if time allows, perhaps include a seven-day calendar reminder and another reminder three days before the deadline, and even a reminder the day before a critical deadline. Using another color-category for these reminders can create another way to draw attention to the fact that a critical deadline is on the horizon (for example, if you see a significant amount of green reminders, or yellow reminders, your eyes will be trained to look ahead and make note of upcoming deadlines). 

If you work with an attorney who prefers to have a paper copy of a printed complaint in their inbox, it can also be helpful to put a colorful sticky note with the answer due date in bold marker on the top of the complaint so that there is a continuous reminder in front of the handling attorney at their desk. While these extra efforts may come at the expense of the trees, having multiple and diverse methods in place for addressing these critical deadlines can be worth the impact on our forests. 

It is also worth considering whether a double-layer, or triple-layer of protection could be helpful. Instead of just adding deadlines and reminders to the handling attorney’s calendar, these same deadlines and reminders should be added to the lead paralegal and/or legal assistant’s calendar as well. It would not be unexpected for the handling attorney to get sidetracked or bogged down in an unexpected project or pressing matter, and if people other than the attorney are monitoring and watching for approaching deadlines, it is less likely that a critical deadline will be missed. The proverbial “two heads are better than one” adage certainly rings true when it comes to managing and adhering to deadlines. 

After the answer has been filed with the court, putting a notation such as “DONE” on the electronic calendar due date is another step that some may find helpful when looking ahead at future deadlines. 

V.            Best Practices

Although most of this has been covered or alluded to, it is worth repeating and summarizing our advice for not only responding to a default situation, but ways to potentially avoid that panic-induced reality all together.

Hire the best people. Of course, this is easier said than done, but having a support team that knows the way you work, anticipates your needs, understands the critical importance of legal deadlines, and effectively manages office procedures and your calendar is so important. However, great support staff are also only as good as the leadership they observe and emulate. Open, effective communication between attorney and support staff is critical. Put your heads together to find ways that work for your practice to create an effective internal docket, including hard deadlines, reminders, and layers of safeguarding that attempt to avoid the possibility of a missed deadline. This could include deadlines on not only the managing attorney’s calendar, but also on the lead paralegal’s calendar, and perhaps even a legal assistant’s calendar.

If a mistake is discovered and a deadline is missed, file your responsive pleadings right away without delay. As soon as pleadings are filed, make a phone call to opposing counsel to try and avoid a headache by securing an extension. Plaintiffs’ counsel would also be well-advised to think long and hard about what might be to gain from refusing an extension. The court always has some discretion in granting a request to enlarge time and has further discretion in vacating a default judgment and yet we all know what the law generally allows and what it does not. If the motion to enlarge time is likely to be granted, perhaps there is more benefit to the plaintiff in working collegially to grant an extension rather than oppose it. There is a famous book that says something along the lines of, “Do unto others as you would have them do unto you,” and perhaps this is advice worth taking to heart if you find yourself asked to extend grace to someone who made a mistake just in case you may yourself make a mistake at some point during the pendency of a case. Finally, if the answer has been drafted and is ready to be filed, then waiting until the last few days of the forty-five (or twenty) day period yields few, if any, significant benefits. An answer that already has been filed cannot become “lost on a desk” when new and more pressing matters demand the attention of the defense attorney, associate, or paralegal working on the file.

Author Biographies:

Erik J. Pless is an attorney at One Law Group S.C. in Green Bay. He received his J.D. degree from the University of Wisconsin in 1993 and a B.A. magna cum laude in 1990 from Wisconsin Lutheran College in Milwaukee. Erik has been an active trial attorney in Northeast Wisconsin since 1993. Over the past 30 years, Erik has litigated more than 80 jury trials to verdict and has argued before the Wisconsin Supreme Court on multiple occasions. He practices primarily in the fields of insurance and tort law, defending insureds and insurers in personal injury, insurance coverage, and bad faith litigation. Erik also handles product liability, legal and other professional malpractice, premises liability, and mold litigation. Erik served on the Board of Directors for the Wisconsin Defense Counsel from 1998 to 2003. He is a member of the Council on Litigation Management and the Association of Defense Trial Attorneys. Erik earned Board Certification as a Civil Trial Specialist from the National Board of Trial Advocacy in 2004.

Alicia M. Stern is a paralegal at One Law Group S.C. Alicia joined One Law Group, S.C. in 2023. After High School, she graduated from Blue Sky School of Massage with certifications in multiple Neuromuscular Therapies working primarily with physical therapy patients. In December 2007, she made a career change to the legal field and joined a general practice firm in Shawano assisting in everything from Municipal, Family, Criminal, Wills, Power of Attorneys, and Real Estate law. Alicia and her family made a move to the Green Bay area, and she has been working as Attorney Pless’s paralegal handling civil defense matters since 2014. Alicia completed the Paralegal Training Program through the University of Wisconsin Oshkosh and is also a State Bar of Wisconsin Certified Paralegal.

Kristen S. Scheuerman joined Weiss Law Office, S.C., in October 2022 after spending more than a decade at a large Fox Valley law firm, where she practiced as a Shareholder. Kristen’s practice has always been focused on personal injury and civil litigation, and before joining Weiss Law Office, she also served as a municipal prosecutor. Throughout her career, Kristen’s practice has also included appellate work in a variety of practice areas. Kristen earned her bachelor’s degree from Lawrence University and her law degree from Marquette University Law School. She is admitted to practice in all Wisconsin state courts and both district courts.