United States District Court, E.D. Wisconsin
DECISION AND ORDER DENYING MOTION FOR DEFAULT
WILLIAM C. GRIESBACH, CHIEF JUDGE.
11, 2017, Plaintiff Grand Chute Holdings LLC brought this
action against Defendants Wild Truffle Artisan Pizzeria and
Italian Bistro Inc. and Marc Waltzer for a breach of
contract, fraudulent conveyance relating to real estate, and
unjust enrichment. ECF No. 1. On May 30, 2017, Plaintiff
filed an amended complaint. ECF No. 5. On October 6, 2017,
Grand Chute Holdings filed a notice of service by
publication. ECF No. 11. As proof of service by publication,
Grand Chute Holdings filed two affidavits by an authorized
representative of the Appleton Post Crescent newspaper,
indicating that a notice had been published in the Post
Crescent for each defendant on September 29, 2017.
Id. On November 27, 2017, Grand Chute Holdings moved
the court for an entry of default and default judgment
pursuant to Federal Rule of Civil Procedure 55(b). ECF No.
13. The matter currently before the court is Grand Chute
Holdings' motion for default judgment.
Rule of Civil Procedure 55 makes a clear distinction between
the entry of default and the entry of default judgment.
Lowe v. McGraw-Hill Cos., Inc., 361 F.3d 335, 339-40
(7th Cir. 2004). Default is entered upon a defendant's
failure to plead or otherwise defend. Fed.R.Civ.P. 55(a). The
entry of default recognizes that a party is in default for
failing to comply with the rules. See Hill v.
Barbour, 787 F.Supp. 146, 148 n.4 (N.D. Ill. 1992). Once
the clerk enters default, the court uses its discretion to
determine whether to enter default judgment pursuant to Rule
are several issues with Grand Chute Holdings' motion for
default judgment. First, Grand Chute Holdings has failed to
follow the procedure established in Rule 55. Rule 55(a)
requires Grand Chute Holdings to move the Clerk for entry of
default before moving for entry of default judgment.
See Fed. R. Civ. P. 55(a).
the second and larger issue is that Grand Chute Holdings has
failed to show that service has been properly executed on
either defendant. “The party moving for entry of
default has the burden of showing that service of process was
effected consistent with Rule 4 of the Federal Rules of Civil
Procedure.” Geraci v. Everhart, No. 09-C-433,
2009 WL 3446193, at * 2 (E.D. Wis. Oct. 23, 2009). “If
the moving party is unable to show proper service or that
proper service was waived, the party should not be granted
entry of default.” Id.
Chute Holdings asserts that it served both defendants via
publication and has filed proof of such service. Federal Rule
of Civil Procedure 4(e)(1) and 4(h)(1)(A) provide that an
individual and a corporation, respectively, may be served by
“following state law for serving a summons in action
brought in courts of general jurisdiction in the state where
the district court or where service is made.” Under
Wisconsin law, if a person or domestic corporation cannot be
served personally after “reasonable diligence, ”
service can by made “by publication of the summons as a
class 3 notice, under ch. 985, and by
mailing.” Wis.Stat. §§ 801.11(1)(a)(c);
801.11(5)(b). Chapter 985 of the Wisconsin Statutes is titled
“Publication of Legal Notices” and provides
requirements for service to be properly effectuated.
Chute Holdings' notice of service by publication is
deficient for two reasons. First, under § 985.02,
Wisconsin law requires that “legal notice shall be
published in a newspaper likely to give notice in the area or
to the person affected.” Grand Chute Holdings placed
the newspaper service in the Appleton Post Crescent, which
provides notice to persons in the greater Appleton, Wisconsin
area. However, Grand Chute Holdings has provided nothing in
the record to support that the Appleton Post Crescent was the
newspaper most likely to give notice to the person (or
company) affected or that publication in the Appleton Post
Crescent would be sufficient to give notice to either
defendant. See PHH Mortg. Corp. v. Mattfeld, 2011
WI.App. 62, ¶ 10-11, 333 Wis.2d 129, 799 N.W.2d 455;
Dwyer v. Schmidt, 120 Wis.2d 673, 355 N.W.2d 253
(Ct. App. 1984). Based off Grand Chute Holdings' service
processor's affidavits, Grand Chute Holdings only
attempted service on each defendant once. ECF No. 8 at 1-2.
Both attempted services were at a Fort Lauderdale, Florida
address. Id. There is no indication that the service
processor attempted service at any Wisconsin address, yet
alone an address that would be within the Appleton area.
Furthermore, Grand Chute Holdings' service processor
stated that he was unable to locate Defendant Marc Waltzer in
Fort Lauderdale or at a Greenville, Wisconsin residence.
Id. at 3. Therefore, Grand Chute Holdings has failed
to offer any support in the record that service by
publication in an Appleton newspaper would be sufficient to
meet the requirements of § 985.02.
Grand Chute Holdings' notice of service by publication is
deficient because Grand Chute Holdings failed to publish the
notifications for the proper amount of time. “To effect
proper service by publication, a plaintiff must publish a
class 3 notice once each week, for three consecutive weeks,
in ‘a newspaper likely to give notice in the area or to
the person affected.'” Krahenbuhl v. Ostrich
Ranchers Ltd. P'ship, No. 96-C-246, 2007 WL 3012712,
at *3 (E.D. Wis. Oct. 12, 2007) (citing Wis.Stat.
§§ 985.02(1), 985.07(3)). Grand Chute Holdings
notice of service by publication indicates that each notice
was published on September 29, 2017. This is insufficient to
effect proper service by publication under Wisconsin law.
Grand Chute Holdings has failed to provide enough information
in the record to support that despite “reasonable
diligence” personal service was unable to be properly
effectuated. Grand Chute Holdings' service processor only
attempted personal service on each defendant once. See
Heaston v. Austin, 47 Wis.2d 67, 74, (holding that the
determination of reasonable diligence will depend on the
facts of the case and affirming a trial court's finding
that attempting personal service twice was not reasonable
diligence); Friebert, Finerty & St. John, SC v.
Doucas, 228 Wis.2d 510, 597 N.W.2d 774 (Ct. App. 1999)
(finding plaintiff had failed to establish reasonable
diligence under § 801.11 when they served by publication
after the sheriff submitted an affidavit that the defendant
could not be found after being unable to locate the defendant
at her business address once). Outside of attempting personal
service once, Grand Chute Holdings' service processor
submitted an affidavit stating that the processor had
performed several searches using Marc Waltzer's social
security number in driver's license records and
department of motor vehicle records and other locations. At
this point, however, because there is only evidence of one
attempted service at a Fort Lauderdale address, the record is
insufficient to support a finding that Grand Chute Holdings
was “reasonably diligent” in attempting to serve
because Grand Chute Holdings has failed to prove that service
has been properly effected consistent with Wisconsin or
federal law, its motion for default judgment is denied. On
September 19, 2017, the court issued a text order extending
Grand Chute Holdings' time to effect service to December
1, 2017. Grand Chute Holdings will be unable to properly
effect service by publication by then. Therefore, the court
will extend Grand Chute Holdings' time to serve
Defendants until February 26, 2018. The court advises Grand
Chute Holdings to ensure that it is properly serving
defendants because the court is unlikely to extend time to
serve again if Grand Chute Holdings continues to fail to
properly effect service on defendants.
IS THEREFORE ORDERED that Plaintiff's motion for
default judgment (Doc. 13) is DENIED. The
hearing previously set for Plaintiff's motion is
IS FURTHER ORDERED that Plaintiff must effect
service on defendants ON OR ...