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Hess v. Fernandez2/25/2005
not within the issues made by the pleadings, the court may allow the pleadings to be amended and shall do so freely when the presentation of the merits of the action will be subserved thereby and the objecting party fails to satisfy the court that the admission of such evidence would prejudice such party in maintaining the action or defense upon the merits. The court may grant a continuance to enable the objecting party to meet such evidence.
Wis. Stat. § 802.09(2). For our review, we interpret each of the parts of the statute as governing separate factual scenarios. State v. Peterson, 104 Wis. 2d 616, 629, 312 N.W.2d 784 (1981).
. The first part of subsection (2) addresses a scenario where the unpleaded issues are tried by the express or implied consent of the parties. Zobel v. Fenendael, 127 Wis. 2d 382, 387, 379 N.W.2d 887 (Ct. App. 1985). We have interpreted this first section of the subsection to be mandatory. Peterson, 104 Wis. 2d at 629. If there is a determination that the issue was tried by the express or implied consent of the parties, the court must amend the pleadings to conform with the proof presented at trial. Id. To determine implied consent, the court must use the test of actual notice, and if it finds no actual notice, it should find no implied consent to try the unpleaded issue. Id. at 634. If, on the other hand, the circuit court finds that there was no consent to the trial of the unpleaded issue, it must apply a balancing test and make an "interests of justice" determination. Zobel, 127 Wis. 2d at 390.
. The second part of the statute addresses a scenario where the evidence presented at trial was objected to for failing to be included in the original pleadings. Id. at 388. This section of the statute grants the circuit court discretion to allow amendments. See Wis. Stat. § 802.09(2). In fact, the statute encourages the circuit court to amend liberally when presentation of the merits of the action is at stake, and if the objecting party fails to show that the amendment would be prejudicial to its continued maintenance of the case. Id.
. The second part of Wis. Stat. § 802.09(2) does not appear to apply here. Because there is nothing in the record which demonstrates that Fernandez and the Fund objected to any evidence presented under Wis. Stat. § 51.61(7)(a), it seems clear that this case must be resolved under the first part of the subsection, as well as under § 802.09(1).
. Hess makes three arguments as to why the circuit court correctly granted its motion for costs and reasonable actual attorney fees. First, Hess argues that the complaint was sufficient as drafted. Because Wisconsin is a notice pleading state, Hess argues that there was no requirement to set forth specifically each claim in the original complaint, but rather that a complaint requires only one cause of action. Second, Hess relies on the circuit court's decision that Fernandez and the Fund had given implied consent, as the elements of the Wis. Stat. § 51.61 claim were "fully aired" during the trial. Finally, Hess argues that Fernandez and the Fund failed in their burden of proving prejudice, as they did not sufficiently identify any hardship resulting from the amended § 51.61(7)(a) claim. Hess also argues that Fernandez and the Fund had opportunities to respond to the motion for costs and reasonable actual attorney fees, and that the failure to make such a response cannot now equate to prejudice.
. Fernandez and the Fund, on the other hand, urge us to follow the interpretation of both Peterson and Zobel, and hold that the circuit court applied the wrong legal standard in allowing the amendment of the complaint. They first argue that the circuit court
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