Alexandra Mucek d/b/a "Alakai Hotel & Suites," Plaintiff-Respondent, v. Nationwide Communications, Inc., Defendant-Appellant, 252 Wis. 2d 426

LUNDSTEN, J. ¶ 1. Nationwide Communications, Inc. (NCI) appeals an order of the trial court denying its motion to withdraw certain admissions. NCI also challenges evidentiary rulings and the court's failure to reduce the jury's punitive damages award. For the reasons that follow, we affirm. Background ¶ 2. Alexandra Mucek is the owner of Alakai Hotel & Suites in Wisconsin Dells, Wisconsin. In January of 1997, Mucek entered into a contract for telephone service with NCI, a long-distance service provider. In April of 1997, Mucek took action to terminate her contract with NCI.

Thereafter, NCI sued Mucek in Michigan, alleging breach of contract. The suit was ultimately dismissed by a Michigan court on jurisdictional grounds. ¶ 3. Mucek filed this suit against NCI in January of 1999, alleging various causes of action for fraud and misrepresentation, as well as breach of contract, negligent supervision, malicious prosecution, and abuse of process. Mucek sought both compensatory and punitive damages. ¶ 4. On March 15, 1999, Attorney Mark Alberg filed a notice of retainer indicating he was representing NCI and on that same day filed an answer.

On May 20, a request for a substitution of counsel for NCI was filed. The court signed the requested order, substituting Attorney Harry Hertel for Attorney Alberg. The record does not indicate the reason for this substitution. ¶ 5. On June 10, 1999, the court issued an order directing that discovery be completed by December 31, 1999. On November 19, 1999, Mucek sent interrogatories and a request to produce documents to NCI. ¶ 6. On December 28, 1999, attorneys for both parties filed a stipulation, approved by the trial court, extending the discovery date until January 7, 2000.

On February 2, 2000, Mucek filed a motion to compel discovery because NCI failed to respond to her interrogatories and request to produce. At a March 15 hearing on Mucek's motion to compel discovery, the trial court orally granted Mucek's motion and gave NCI until March 29, 2000, to respond. Previously, on February 22, the trial court had set trial for August 8, 2000, and extended the deadline for discovery to July 31, 2000. ¶ 7. On March 20, 2000, NCI's attorney, Harry Hertel, filed a motion to withdraw.

In a supporting affidavit, the attorney stated that NCI had consistently failed to cooperate with counsel regarding discovery and would not even return his phone calls. The attorney noted that he had appeared at three hearings on motions to compel discovery against NCI in three separate cases. The motion to withdraw was granted. ¶ 8. On March 22, 2000, the trial court issued a written order granting Mucek's motion to compel, which, consistent with the oral order, gave NCI until March 29 to comply.

In this order, the court warned NCI that the court would consider a motion to strike NCI's answer to the complaint, including NCI's denial of liability, if NCI failed to comply. ¶ 9. On April 3, counsel for Mucek filed a motion to strike NCI's answer along with a supporting affidavit stating that he had received no response to the interrogatories or request for documents from NCI. The motion included a notice of hearing on April 10. ¶ 10. NCI failed to respond to discovery, and a hearing was held on April 10, 2000, to address Mucek's motion to strike NCI's answer.

NCI failed to appear, and the court orally granted the motion. A written order to this effect was issued on April 24, 2000. This order found NCI 100% liable and indicated the only remaining issue was damages. ¶ 11. On June 15, 2000, Mucek mailed to NCI a first request for admissions and a second set of interrogatories. Because there was no attorney of record, Mucek served the request on Robert Miller, the general manager for NCI. NCI failed to respond to the request for admissions within the statutory thirty-day time limit and, by statute, the matters asserted in the request were deemed admitted. See Wis.

Stat. § 804.11(l)(b) (1997-98). ¶ 12. On July 24, 2000, Attorney Charles Pellino was retained by NCI and filed a notice of retainer. On August 3, Attorney Pellino filed a motion to extend the time for answering the request for admissions or, alternatively, to withdraw the admissions. In a supporting affidavit, Attorney Pellino stated that his preparation was hampered by the fact that NCI was involved in three cases that were "tightly scheduled" and that he had not yet received all the documents filed in this matter, including the request for admissions. ¶ 13.

The trial court denied that motion orally during a hearing on August 3. For the most part, the arguments of the parties during this hearing were not recorded. Instead, the court went on the record at the end of the hearing to summarize and make its ruling. The recorded comments of the trial court and the attorneys make it apparent that NCI did not provide evidence at this hearing, or prior to it, showing that its failure to respond to the request for admissions was anything more than a continuation of its pattern of discovery abuse.

The comments also show that NCI's new counsel asserted that the failure to respond was due toa "mix-up." Mucek's counsel responded: "There is no statement by anyone from NCI or from this hidden law firm which, supposedly, was part of the mix-up. There is just vague allegations of such." On August 4, 2000, the judge signed a written order denying NCI's requests for an adjournment, to extend the time to respond to admissions, and to withdraw admissions. ¶ 14. On the first day of trial, August 8, 2000, NCI filed a response to Mucek's first request, for admissions and second set of interrogatories.

NCI's counsel asked the court to reconsider its decision to strike NCI's answer to the complaint and renewed the motion to withdraw the admissions. Mucek's counsel's responses included the following: Up until approximately four days ago, NCI has done nothing to cooperate with getting plaintiff discovery or any facts regarding this case .... Turning our attention to the requests for admission, again, [the] Court needs to look at the totality of the circumstances as to what happened and what was going on in this case.

Now, counsel drops, this morning, an affidavit with all these factual allegations as to why they should be relieved of these requests for admissions. We're only 14 days late, come on, close enough .... First of all, keep in mind plaintiffs have been trying for now almost 2 years to get discovery, to get factual information. And, most importantly in this case, to get documents which would document exactly what contracts were altered, what contracts were forged.

The trial court denied NCI's request that it reverse its earlier rulings, again relying on NCI's history of abuse and concluding: "They have simply played games with the Court." ¶ 15. In connection with the damages issue at trial, NCI filed a motion in limine seeking exclusion of testimony from two other hotel owners in the Wisconsin Dells area, who had similarly been sued by NCI for breach of contract, on the basis that the testimony constituted inadmissible other acts evidence.

The trial court denied that motion, stating that punitive damages are designed to punish egregious conduct and, to the extent that NCI was engaging in a course of egregious conduct, the testimony was relevant. ¶ 16. At trial, Mucek testified that sometime in late 1996 or early 1997, James Donker, a sales representative with NCI, approached her about changing her long-distance telephone service. Donker presented a standard form, carbonless, duplicate contract (containing a top white copy and a bottom yellow copy). The contract provided on the back that it would remain in effect for sixty months.

Because Mucek objected to entering into a five-year contract with NCI, Donker crossed out the sixty-month language and changed it to twelve months. On the front of the contract, Donker also wrote: "You may void this contract at any time and for any reason." Both. Donker and Mucek initialed the changes. Donker took the white copy and Mucek kept the yellow copy. ¶ 17. Mucek testified that after her hotel customers complained about being overcharged for long-distance calls, she decided to terminate the contract with NCI.

She said that NCI sued her in Michigan for breach of contract and, in the course of that litigation, NCI produced a contract that was different from the one she had signed. Although her signature was the same on the contract NCI produced, the language making the contract voidable at any time, handwritten at the bottom of the contract by Donker, was missing. Additionally, the changes made to the back of Mucek's copy of the contract regarding the sixty-month term were also missing from the NCI copy.

Finally, a paragraph was inserted on the back page of NCI's copy that stated the agreement would be governed and construed under the laws of the State of Michigan. ¶ 18. The parties stipulated that Mucek paid lawyers in Michigan $4350 to defend the suit brought by NCI. Mucek testified that the suit in Michigan was ultimately dismissed. ¶ 19. Mucek then introduced the testimony of Angie Tylka and Mary Maniak, both hotel owners in the Wisconsin Dells area. Both Tylka and Maniak testified that they too signed contracts with NCI for long-distance telephone services after being approached by Donker.

Both women also objected to the five-year terms in their respective contracts, and Donker modified the contracts by adding language indicating that the contracts could be voided at any time. ¶ 20. When Tylka and Maniak terminated their contracts with NCI prior to the expiration of five years, NCI sued both for breach of contract. Tylka testified that the lawsuit against her was eventually dropped. Maniak testified that NCI maintained the lawsuit against her even after learning of Donker's changes to the contract, arguing that Donker was not authorized to make those changes.

Maniak also testified that after paying a lawyer in Michigan $4000, she gave up defense of the suit because she could not afford to continue it. Maniak instead decided to remain an NCI customer for the contract term. ¶ 21. Richard Makens then testified on behalf of NCI. Makens is the president of NCI. Makens testified that NCI uses a five-year contract in order to recoup money initially spent on customer sign-up bonuses and equipment installation. Makens stated that Donker did not have authority to alter the contracts by making them voidable at any time.

Makens testified that NCI brought suit against Mucek because she refused to return to NCI and because NCI had lost as many as ten hotels as customers in a thirty-day period. NCI wanted to send a message to the customers in order to "stem the tide." ¶ 22. Makens also testified that he is the one to approve all contracts on behalf of NCI, and he never saw any contracts with handwritten language added making the contracts voidable for any reason.

He stated that the contracts that were given to the lawyers who initiated the lawsuits against Mucek, Tylka, and Ma-niak did not contain any handwritten notations; rather, they were the standard form contracts. Makens also testified that when NCI learned about the language Donker inserted on Mucek's contract, it did not drop the suit against her. Rather, the court ultimately dismissed the suit on jurisdictional grounds. ¶ 23. Additional facts will be set forth below where they are pertinent to the analysis. Discussion A. Withdrawal of the Admissions ¶ 24.

NCI does not suggest that the trial court's order striking its answer to the complaint and imposing 100% liability was erroneous. Nor does NCI dispute that when it failed to respond to Mucek's request for admissions, the assertions made in Mucek's request were deemed admitted. Rather, NCI argues that the trial court erroneously exercised its discretion when it denied NCI's motion to withdraw the admissions. ¶ 25. The decision to allow relief from the effect of an admission is within the trial court's discretion. Schmid v. Olsen, 111 Wis. 2d 228, 237, 330 N.W.2d 547 (1983).

We will uphold a trial court's discretionary act if the court examined the relevant facts, applied a proper standard of law, and, demonstrating a rational process, reached a conclusion that a reasonable judge could reach. Loy v. Bunderson, 107 Wis. 2d 400, 414-15, 320 N.W.2d 175 (1982). At the same time, if a trial court fails to adequately set forth its reasoning, we may independently review the record to determine if it provides a basis for the court's exercise of discretion. See State v. Pharr, 115 Wis. 2d 334, 343, 340 N.W.2d 498 (1983). ¶ 26.

When a party fails to respond to a request for an admission within thirty days of service, or within a shorter or longer time period set by the court, the matter is admitted. Wis. Stat. § 804.11(1)(b). A matter admitted is conclusively established unless the court permits withdrawal. Wis. Stat. § 804.11(2).

A court's authority to permit withdrawal is constrained by the following language found in § 804.11(2): The court may permit withdrawal or amendment when the presentation of the merits of the action will be subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice the party in maintaining the action or defense on the merits.

Thus, the statute provides that a court "may" permit withdrawal or amendment only if "the merits of the action will be subserved" and if the party who benefits from the admission "fails to satisfy the court that withdrawal.. . will prejudice" the benefiting party. ¶ 27. It is evident that the trial court in this case exercised its discretion to deny withdrawal under the view that Mucek had met her burden of showing prejudice. Furthermore, the trial court's assessment of prejudice took account of NCI's ongoing failure to cooperate with discovery.

Five days prior to trial, during the court's oral ruling denying NCI's request to adjourn the trial and extend the time for discovery (including the time to respond to Mucek's request for admissions), the court noted that one prior counsel for NCI withdrew because NCI failed to cooperate with discovery. The court went on to say: The defendants, to date, have failed to comply with discovery.

They have taken no action, nor entered any appearance or been heard from, as far as the court file indicates, since [Attorney] Hertel withdrew on March 28th, excepting from that the subsequent proceedings brought by [Mucek's counsel] for the default judgment against them. Rarely have I really seen such egregious conduct on the part of a defendant and to come in at the last moment and say the other side is not prejudiced and we should be able to essentially reopen this matter simply doesn't carry any weight with me.

I do agree with [Mucek's counsel] that the affidavit submitted [by NCI's counsel] sets forth no basis upon which - first hand basis upon which defendant explains the conduct and lack of performance according to the procedural rules of this case and the State. ¶ 28. NCI complains that the trial court's application of Wis. Stat. § 804.11 involved an incorrect legal standard. NCI views the prejudice question as simply whether Mucek was worse off because she lost a couple weeks of preparation time just prior to trial.

NCI argues that this was the only loss attributable to its failure to respond to admissions and that it had already been separately punished for its failure to comply with discovery. We disagree. For the reasons that follow, a trial court may consider a party's history of discovery abuse when deciding whether to permit withdrawal or amendment of admissions, both when determining prejudice under § 804.11(2) and when otherwise exercising the court's authority to control the orderly and prompt processing of a case. ¶ 29. We first address prejudice under Wis. Stat. § 804.11(2).

The construction of a statute is a question of law we review de novo. State v. Irish, 210 Wis. 2d 107, 110, 565 N.W.2d 161 (Ct. App. 1997). The language in § 804.11(2) that we interpret was adopted from and is nearly identical to its counterpart provision in Rule 36(

b) of the Federal Rules of Civil Procedure. See Fed. R. Civ. E 36; Bank of Two Rivers v. Zimmer, 112 Wis. 2d 624, 630, 334 N.W.2d 230 (1983). Accordingly, we may look to federal case law for guidance in our analysis. State v. Evans, 2000 WI App 178, ¶ 8 n.2, 238 Wis. 2d 411, 617 N.W.2d 220 ("[W]here a state rule mirrors the federal rule, we consider federal cases interpreting the rule to be persuasive authority."). ¶ 30. We find no Wisconsin case defining "prejudice" in this context, but it is commonly understood to mean injury, damage, or detriment. See City of Madison v.

Lange, 140 Wis. 2d 1, 7, 408 N.W.2d 763 (Ct. App. 1987). Federal cases explain that the prejudice contemplated by this statute is not simply that a party would be worse off without the admissions. See ADM Agri-Indus., Ltd. v. Harvey, 200 F.R.D. 467, 471 (M.D. Ala. 2001); see also Bergemann v. United States, 820 F.2d 1117, 1121 (10th Cir. 1987) ("The prejudice contemplated by Rule 36(

b) is not simply that the party who obtained the admission now has to convince the jury of its truth."). Rather, the party benefiting from the admission must show prejudice in addition to the inherent consequence that the party will now have to prove something that would have been deemed conclusively established if the opposing party were held to its admissions. That additional harm is present here. ¶ 31. The purpose of the admissions process "is to expedite trial by establishing certain material facts as true . . . thus narrowing the range of issues for trial." Asea, Inc. v. S. Pac. Transp.

Co., 669 F.2d 1242, 1245 (9th Cir. 1981). In situations where parties fail to respond to requests for admissions, there is a difference between those cases in which a party has cooperated with discovery and those cases, like this one, in which a party has failed to cooperate throughout the pendency of the case. A party's ongoing failure to provide documents and information will frequently magnify the importance of requests for admissions precisely because the requesting party has already been deprived of requested information and is all the more dependent on admissions to identify what is actually in dispute.

This proposition is implicitly recognized by several courts which have considered a pattern of discovery abuse when upholding or addressing the denial of a request to withdraw admissions. ¶ 32. In this case, NCI's complete failure to cooperate by not responding to interrogatories or requests for documents meant that its failure to respond to requests for admissions left Mucek in the dark regarding what exactly NCI was willing to admit regarding, among other things, NCI's interaction with its employee Donker, its general level of sales and net worth, and its ongoing practices.

No doubt NCI would have denied several of the assertions contained in the request for admissions, but Mucek could not know which items NCI might admit if it made a good faith effort to respond to the requests. When NCI first provided answers to some interrogatories and to requests for admissions on the eve of trial, it was too late to cure the harm because of all the time and money Mucek had already expended attempting to prepare for trial. ¶ 33.

We also disagree with NCI's argument that it had already been penalized for its discovery abuse because the trial court responded to that abuse by striking NCI's answer and finding the company liable. Even after the trial court entered that order in April of 2000, NCI continued its pattern of abuse. As Mucek's counsel aptly observed on August 8, 2000, the first day of trial: "Up until approximately four days ago, NCI has done nothing to cooperate with getting plaintiff discovery or any facts regarding this case." ¶ 34.

Furthermore, we would reach the same result even if a party's history of discovery abuse were not a proper consideration under the prejudice prong of Wis. Stat. § 804.11(2).

Section 804.11(2) provides that a court "may" permit withdrawal of an admission if two conditions are met. "May" is generally construed as permissive and "shall" is generally construed as mandatory, unless a different construction is demanded by the statute to carry out the clear intent of the legislature. City of Wauwatosa v. Milwaukee County, 22 Wis. 2d 184, 191, 125 N.W.2d 386 (1963). Thus, we conclude that a court "may" permit withdrawal if both statutory conditions are met, but it is not required to do so. This construction is in keeping with federal case law on the topic. E.g., Carney v.

IRS, 258 F.3d 415, 419 (5th Cir. 2001) ("Even when these two factors are established, a district court still has discretion to deny a request for leave to withdraw or amend an admission."); Donovan v. Carls Drug Co., 703 F.2d 650, 652 (2nd Cir. 1983) ("Because the language of [Rule 36(b)] is permissive, the court is not required to make an exception to Rule 36 even if both the merits and prejudice issues cut in favor of the party seeking exception to the rule."); United States v. Kasuboski, 834 F.2d 1345, 1350 n.7 (7th Cir. 1987) ("Rule 36(

b) allows withdrawal of admissions if certain conditions are met and the district court, in its discretion, permits the withdrawal." (Emphasis supplied.)). ¶ 35. A trial court's general authority to maintain the orderly and prompt processing of cases provides authority to deny withdrawal, apart from the two factors in Wis. Stat. § 804.11(2). See Furrenes v. Ford Motor Co., 79 Wis. 2d 260, 265-67, 255 N.W.2d 511 (1977). This authority is both statutory and inherent.

Wisconsin Stat. § 805.03 provides: "[F]or failure of any party to comply with the statutes governing procedure in civil actions . . . the court in which the action is pending may make such orders in regard to the failure as are just. . . ." In Belich v. Szymaszek, 224 Wis. 2d 419, 428, 592 N.W.2d 254 (Ct. App. 1999), we stated that it is a "well-established rule that a trial court has both statutory and inherent authority to sanction a party for failing to comply with procedural rules and for failing to obey court orders." ¶ 36.

In light of these principles, we have no hesitation in affirming the trial court's exercise of discretion in this case. The trial court said it had rarely "seen such egregious conduct on the part of a defendant." The record, as set forth in the "background"

section of this decision, amply supports this characterization. NCI continually failed to cooperate with discovery and, indeed, failed to cooperate with its own counsel. Its lack of cooperation continued after it was sanctioned the first time. At the hearing five days prior to trial, NCI provided no basis for finding that its failure to respond to the request for admissions was excusable. Cf. Hudson Diesel, Inc. v. Kenall, 194 Wis. 2d 531, 542-43, 535 N.W.2d 65 (Ct.

App. 1995) (if noncomplying party's conduct is in bad faith or, "though unintentional, is so extreme, substantial and persistent that it can properly be characterized as egregious, the trial court may dismiss the action"). By simply laying out NCI's failure to cooperate right up until the eve of trial, Mucek met her burden of showing prejudice. ¶ 37. Therefore, we conclude that the trial court did not erroneously exercise its discretion when it denied NCI's request to withdraw its admissions. B. Admission of Other "Bad Acts" Evidence ¶ 38.

NCI next argues that the trial court erroneously exercised its discretion when it permitted Mucek to question witnesses regarding other acts evidence in violation of Wis. Stat. § 904.04(2). In particular, NCI argues that the following evidence constituted inadmissible other acts evidence: (1) the testimony of Tylka and Maniak; (2) evidence of complaints filed against NCI with the Michigan Attorney General's office; and (3) a newspaper

article indicating that NCI uses the threat of lawsuits to retain its customers. NCI also suggests that the evidence is irrelevant and unfairly prejudicial. See Wis. Stat. §§ 904.02, 904.03. ¶ 39. The decision to admit or exclude evidence is discretionary and we will not overturn that decision absent a showing that the circuit court erroneously exercised its discretion. Sullivan v. Waukesha County, 218 Wis. 2d 458, 470, 578 N.W.2d 596 (1998). Other acts evidence is admissible if: (1) it is offered for an acceptable purpose under Wis.

Stat. § 904.04(2); (2) it is relevant; and (3) its probative value is not substantially outweighed by the danger of unfair prejudice. See State v. Gray, 225 Wis. 2d 39, 49-50, 590 N.W.2d 918 (1999). ¶ 40. In this case, NCI's liability was determined when the trial court struck NCI's answer to the complaint. Additionally, the parties stipulated to compensatory damages. Thus, the only remaining questions for the jury on the special verdict form were related to punitive damages.

Punitive damage factors include the "grievousness of defendant's act, the outrageousness of his conduct and the 'degree of malicious intention.'" Lundin v. Shimanski, 124 Wis. 2d 175, 196, 368 N.W.2d 676 (1985) (citation omitted). Punitive damages serve the dual purpose of punishment and deterrence. See Smith v. Golde, 224 Wis. 2d 518, 532, 592 N.W.2d 287 (Ct. App. 1999). "It is self-evident that the greater the number of abusive incidents, the greater the need for deterrence and, correspondingly, an award calculated to achieve that purpose." Id. ¶ 41.

In Golde, in the context of a punitive damages award, the court rejected a defendant's argument that a non-party witness's testimony concerning prior batteries committed by the defendant was inadmissible other acts evidence under Wis. Stat. § 904.04(2). In so holding, the court noted that "[o]ther acts evidence may be admitted for purposes other than those enumerated in § 904.04(2)." Golde, 224 Wis. 2d at 532. Thus, the witness's testimony concerning the prior batteries was admissible to show a pattern of abusive incidents, evidencing the maliciousness of the defendant's conduct. See id. at 532-33. ¶ 42.

Similarly, the testimony of Tylka and Ma-niak, that they too were sued for breach of contract after voiding their contracts with NCI pursuant to terms added to the contract allowing the contract to be voided at any time, was properly admitted under Wis. Stat. § 904.04(2) and was relevant evidence of the grievous nature of NCI's conduct. The same analysis applies to the complaints filed with the Michigan Attorney General's office against NCI, encompassing claims that NCI fraudulently locked consumers into five-year contracts, and the newspaper

article wherein hotel owners were quoted as saying that NCI prevents unsatisfied customers from changing phone service through legal intimidation. All of this evidence was properly admitted for the purpose of demonstrating the egregiousness of NCI's conduct. ¶ 43. We also reject NCI's argument that the probative value of the evidence was outweighed by the risk of unfair prejudice. "Unfair prejudice," as that term is used in Wis. Stat. § 904.03, means a tendency to influence the outcome of a trial by improper means. Christensen v. Econ. Fire & Cas. Co., 77 Wis. 2d 50, 61, 252 N.W.2d 81 (1977).

Other acts evidence is generally excluded because it is believed that such evidence will "subtly encourage jurors to infer that the defendant has a propensity to commit such wrongs." State v. Benoit, 229 Wis. 2d 630, 639, 600 N.W.2d 193 (Ct. App. 1999) (citation omitted). Application of the traditional prejudice analysis as it applies to other acts evidence simply does not comport with the use of such evidence in the context of a punitive damages claim.

This is because, as noted, introduction of the other acts is relevant precisely for the purpose of showing a defendant's propensity to commit a pattern of abusive acts. Accordingly, we affirm the trial court's decision to admit other acts evidence. C. Reduction of the Punitive Damages Award ¶ 44. We turn now to NCI's argument that the trial court erred in declining to reduce the jury's punitive damages award. ¶ 45. An award of punitive damages is within a jury's discretion. Jacque v. Steenberg Homes, Inc., 209 Wis. 2d 605, 626, 563 N.W.2d 154 (1997).

Nevertheless, a trial court may reduce punitive damages if the award is so clearly excessive as to indicate that the award was the product of passion or prejudice. Id. On review, it is the duty of this court to construe the evidence most favorably to the jury's verdict. Durham v. Pekrul, 104 Wis. 2d 339, 349, 311 N.W.2d 615 (1981). While there must be a reasonable relationship between the amount of compensatory and punitive damages, there is no multiplier or fixed ratio of compensatory to punitive damages. Mgmt. Computer Servs., Inc. v. Hawkins, Ash, Baptie & Co., 206 Wis. 2d 158, 194, 557 N.W.2d 67 (1996). ¶ 46.

By failing to timely respond to the request for admissions, NCI admitted that it commenced the Michigan lawsuit with full knowledge of the contract actually signed by Mucek, that doing so constituted an intentional disregard for Mucek's rights, that it commenced the lawsuit for the purpose of maliciously harassing and intimidating Mucek into continuing to use NCI's services, and that its worth was $4,664,296.00. ¶ 47.

Additionally, at trial Mucek presented evidence that after becoming aware of the language inserted into the contracts by Donker, making them voidable at any time, NCI continued the suits against Mucek and Maniak, and that Maniak was forced to remain an NCI customer for the contract term because she could not afford the legal fees. There was also evidence that NCI intimidated Michigan customers into retaining NCI services via the threat of lawsuits and that Michigan consumers had made allegations against NCI that NCI defrauded them into signing five-year contracts.

In light of this evidence, we hold that the punitive damages award of $225,000 was not so excessive as to suggest that it was the result of passion or prejudice. Accordingly, we affirm the trial court's decision to uphold the punitive damages award. D. Discretionary Reversal ¶ 48. Finally, NCI requests discretionary reversal and an order for a new trial, pursuant to Wis. Stat. § 752.35, on the basis that the real controversy was not tried as a result of the trial court's alleged evidentiary errors. Because we have determined that no error occurred, we deny NCI's request for discretionary reversal.

By the Court. — Judgment and order affirmed. All references to the Wisconsin Statutes are to the 1997-98 version unless otherwise noted. NCI submitted an affidavit from its general manager, Robert Miller, on the first day of trial indicating that after Attorney Hertel's withdrawal, but prior to NCI's retainer of Attorney Pellino, NCI retained the firm of Clifford & Raihala. Miller alleged that he received Mucek's first request for admissions and second set of interrogatories on June 19 and "believe[d]" he answered them and sent them by facsimile to Clifford & Raihala prior to July 19.

At trial, Mucek submitted an affidavit from John Raihala. Raihala asserted that in early May 2000, he agreed to represent NCI. However, because of problems experienced by NCI's prior counsel, Raihala's law firm's retainer agreement required NCI to pay its monthly bills promptly. Following Raihala's first month of work, NCI breached the agreement and Raihala wrote to NCI advising that his law firm was withdrawing as NCI's attorneys. NCI sought and obtained another chance, promising to send payment, but NCI failed to follow through and Clifford & Raihala withdrew as counsel on June 30, 2000.

Raihala stated that he never received from Miller or any other NCI employee any requests for admission or any other discovery. Raihala stated he reviewed the activity report produced by his firm's facsimile machine between May 1, 2000, and August 1, 2000, and found just one facsimile from NCI dated May 3, 2000. It appears NCI's counsel orally requested an adjournment of the trial during the August 3 hearing. The dissent asserts that the record shows the circuit court improperly placed the burden on NCI to show that Mucek was not prejudiced. Dissent at ¶ 59. We disagree.

Although the arguments of counsel at the August 3 hearing were, for the most part, not recorded, it appears from the circuit court's comment that the court heard a prejudice argument from Mucek's counsel and found it persuasive. (Mucek's counsel had opposed NCI's pending motions, presumably including NCI's request for withdrawal of admissions, based on "the history of the case.") Other comments by the circuit court indicating that it found NCI's arguments unpersuasive do not show that the court wrongly placed the burden of showing prejudice on NCI.

Moreover, the burden at issue is plainly spelled out in the statute under which NCI brought its motion, Wis. Stat. § 804.11(2). The burden is on the appellant to demonstrate that the trial court erred, Seltrecht v. Bremer, 214 Wis. 2d 110, 125, 571 N.W.2d 686 (Ct. App. 1997), and NCI has failed to show that the circuit court applied an erroneous legal standard. Further, the manner in which we resolve this issue makes it unnecessary to scrutinize whether NCI met its burden of showing that the merits of the case would be subserved by allowing withdrawal of the admissions.

Federal courts have held that the party making the admission must show that presentation of the merits will be subserved by withdrawal and that this inquiry involves consideration of whether the admission is contrary to the record in the case. Simien v. Chem. Waste Mgmt., Inc., 30 F. Supp. 2d 939, 941-42 (W.D. La. 1998). Federal R. Civ. E 36(

b) reads in pertinent part: Subject to the provision of Rule 16 governing amendment of a pre-trial order, the court may permit withdrawal or amendment when the presentation of the merits of the action will he subserved thereby and the party who obtained the admission fails to satisfy the court that withdrawal or amendment will prejudice that party in maintaining the action or defense on the merits. E.g., United States v.

Kenealy, 646 F.2d 699, 702-03 (1st Cir. 1981) (in affirming trial court's denial of request to withdraw admissions, reviewing court stated: "Given appellants' opaque, generalized, and tardy denials,... and their incredibly cavalier conduct in this litigation, we decline to tamper with the district court's action, which was well within its discretion."); ADM Agri-Indus., Ltd. v. Harvey, 200 F.R.D. 467, 471 (M.D.

Ala. 2001) (in denying request to withdraw admissions, court stated: "Counter-balancing [the first prong of the test], however, is the problem that litigation on the merits is itself impaired by [the defendant's] pattern of uncooperativeness with the discovery

schedule and court orders, and the fact that the court has no way of knowing whether [the defendant's] lack of cooperation is motivated by a simple desire to delay the prosecution of [the plaintiffs] case on the merits."); Cleveland Trust Co. v. Willis, 485 N.E.2d 1052, 1053-54 (Ohio 1985) (in affirming trial court's denial of request to withdraw admissions, court considered party's history of failing to cooperate with discovery); U.S. Clip Corp. v. McThal, Inc., 729 S.W.2d 658, 660 (Mo. Ct.

App. 1987) (in affirming trial court's denial of request to withdraw admissions, court observed: "Here there was a long history of dilatory tactics by defendant which the trial court noted in its judgment . . . ."). Mucek's requested admissions included the following: REQUEST NO. 1: That attached hereto as Exhibit "A" is a true and correct copy of the actual "Long Distance/Operator Services Agreement" (hereinafter "Actual Contract") entered into between plaintiff and defendant, which contains handwritten modifications by NCI's authorized agent, James Donker and initialed by plaintiff.

REQUEST NO. 2: That NCI had full knowledge of the Actual Contract and all of the handwritten modifications made by its authorized agent, James Donker.

REQUEST NO. 3: NCI had actual knowledge that the Actual Contract contained the provision that plaintiff "may void contract at any time and for any reason." REQUEST NO. 4: That when plaintiff voided the contract, pursuant to the terms of the contract, NCI brought a lawsuit against plaintiff claiming 'breach of contract, specific enforcement, and tortuous interference with advantageous business relationship and/or contractual relationship." REQUEST NO. 6: That "Exhibit 1" to the aforementioned Michigan Summons and Complaint is a modified contract (hereinafter "Modified Contract"), which is identical to the Actual Contract, except that someone removed the handwritten modifications, added a sentence about "table tents" and inserted a "Governing Law" paragraph to the second page of the contract.

REQUEST NO. 10: That attached hereto as Exhibit "C" is a true and correct copy of a Long Distance/Operator Services Agreement entered into between NCI and Mary Maniak of the New Concord Inn in Wisconsin Dells (hereinafter "Actual New Concord Contract"), (with the exception that Exhibit "C" has a note stating, "This is original contract", which does not appear on the original document). REQUEST NO. 13: That NCI commenced a breach of contract lawsuit against Ms. Maniak and/or New Concord Inn with the full knowledge that the attached Modified New Concord Contract was not signed by Ms. Maniak and that Ms.

Maniak's actual contract allowed her to cancel if she was unhappy with NCI's service. REQUEST NO. 16: That NCI has been successful in enforcing altered, forged, or otherwise modified contracts in Michigan circuit court against Wisconsin businesses and consumers and has made a substantial profit from this practice. REQUEST NO. 17: That attached hereto as Exhibit "E" is a true and correct copy of a Dunn & Bradstreet's Business Information Report (hereinafter "D&B Report") of defendant NCI as of February 28, 1999.

REQUEST NO. 18: That the financial information contained on the aforementioned D&B Report is true and accurate as of February 28, 1999. REQUEST NO. 19: That as of February 28,1999, NCI's sales amounted to $21,115,262.00 and NCI's worth was $4,664,296.00. The context of NCI's request to withdraw its admissions is also noteworthy. Although on appeal we focus on just the request to withdraw admissions, during the days immediately preceding the trial NCI was seeking to turn back the clock on the entire case. NCI sought reinstatement of its answer, an adjournment of trial, and withdrawal of its admissions.

Because the trial court addressed and denied all of these requests, the court's comments did not focus on what would have happened if the court had only granted the request to withdraw admissions. However, given NCI's failure to cooperate with discovery, it is likely that Mucek would have needed an adjournment to obtain additional evidence. An adjournment of the trial and the need to again attempt discovery would itself constitute prejudice to Mucek. See Equal Employment Opportunity Comm'n v.

Jordan Graphics, Inc., 135 F.R.D. 126, 128-29 (W.D.N.C. 1991) (likely delay of trial and need for additional discovery added to prejudice that would he suffered if withdrawal were permitted). We note that federal courts have considered the absence of a reasonable excuse for failing to respond to a request for admission, even within the framework of the federal counter-partto Wis. Stat. § 804.11(2). E.g., Dukes v. South Carolina Ins. Co., 770 F.2d 545, 548-49 (5th Cir. 1985); Wallace v. Best Western Northeast, 183 F.R.D. 199, 201-04 (S.D. Miss. 1998).

NCI also refers to the evidence as hearsay and lacking a proper foundation. We may decline to address issues that have not been adequately briefed, and we do so here. See State v. Pettit, 171 Wis. 2d 627, 646, 492 N.W.2d 633 (Ct. App. 1992). WisConsin Stat. § 904.04(2) provides as follows: OTHER CRIMES, WRONGS, OR ACTS. Evidence of other crimes, wrongs, or acts is not admissible to prove the character of a person in order to show that the person acted in conformity therewith.

This subsection does not exclude the evidence when offered for other purposes, such as proof of motive, opportunity, intent, preparation, plan, knowledge, identity, or absence of mistake or accident. We question whether other acts analysis under Wis. Stat. § 904.04(2) even applies to evidence offered to support a claim of punitive damages, so long as liability has previously been established. The other acts evidence statute is primarily directed at preventing fact finders from being exposed to character and propensity evidence in the context of determining whether a party committed an alleged act. See State v.

Benoit, 229 Wis. 2d 630, 639, 600 N.W.2d 193 (Ct. App. 1999). To the extent a fact finder relies on such evidence in this context, it runs afoul of longstanding Anglo-Saxon jurisprudence holding that persons should be found liable based on evidence of a particular act, not based on bad character or propensity to commit the alleged act.