¶ 1. SHIRLEY S. ABRAHAMSON, C.J.

The defendant, Physicians Insurance Company of Wisconsin, Inc. (PIC), seeks review of a published decision of the court of appeals. For purposes of this review, the court of appeals affirmed a judgment by default rendered by the Circuit Court for Dunn County, Rod W. Smeltzer, Judge, against PIC for damages suffered by plaintiffs Shelley Otto, Ashley Otto, Amanda Otto, and the Estate of Dale Otto (collectively, the plaintiff) as a result of the alleged medical malpractice of PIC's codefendant insureds. We affirm the decision of the court of appeals.

¶ 2. Our analysis is as follows:

I. We begin by stating what is not at issue in the present case.

II. We state the issue presented.

III. We explore the facts.

IV We consider and reject each of PIC's arguments in turn.

I

¶ 3. Whether PIC is in default is not at issue. Although PIC vigorously disputed the issue of its default before the circuit court and court of appeals, PIC does not dispute here that it is in default.

¶ 4. PIC argued before the circuit court that although it had failed to serve an answer timely in response to the plaintiffs amended complaint naming PIC as a defendant, PIC should not be held in default under the circumstances of the present case. PIC moved for the circuit court to enlarge the time in which PIC could file and serve its answer, arguing that its neglecting to serve an answer within the time originally specified was excusable.

¶ 5. PIC explained its failure to serve an answer timely as follows: PIC hired counsel to represent PIC and all of PIC's codefendants (most of whom were PIC's insureds) in the action; the counsel hired by PIC intended to serve an answer timely on behalf of all defendants in the action, including PIC; the counsel timely served an answer (which denied the liability of all defendants) on behalf of PIC's codefendants but inadvertently omitted PIC's name from the caption of the answer; counsel's inadvertent omission of PIC's name stemmed from a clerical or computer-based error without PIC's, counsel's, or counsel's staffs fault; the parties continued to litigate the action for more than nine months before anyone noticed PIC's failure to answer and for more than one year before the plaintiff moved for default judgment against PIC; the plaintiff and all other parties knew or believed all along that the counsel representing PIC's codefendants was also representing PIC; and the counsel hired by PIC immediately filed an amended answer including PIC's name in the caption when counsel's prior omission was finally called to his attention.

¶ 6. PIC argued to the circuit court that notwithstanding the oversight of its counsel, PIC had at all times diligently defended the action on its merits on behalf of itself and its codefendants. PIC contended that when counsel's oversight has caused no prejudice to the plaintiff, the interests of justice weigh heavily in favor of accepting PIC's answer. The plaintiff did not argue to the circuit court that it was prejudiced by PIC's failure to serve its answer timely.

¶ 7. PIC's argument to the circuit court was unsuccessful. The circuit court found as matters of fact that the counsel purportedly representing PIC had accepted service of the plaintiffs amended complaint on behalf of PIC's codefendants but had refused to accept service on PIC's behalf; that the plaintiff had been forced to serve its amended complaint to PIC personally; that there was no evidence in the record showing that PIC ever notified counsel that it had been served with the amended complaint or requested counsel to serve or file an answer on its behalf; that "[f]rom October 30, 2003 through August 24, 2004 (when PIC filed an Answer with the Court), [counsel for the codefendants] filed numerous formal documents with the Court, none listing PIC as being represented by his firm"; that "[h]earings were held on motions to strike the expert testimony of Dr. Melby [an expert witness called by the plaintiff] on April 20, 2004 and to strike certain testimony of Dr. Hogan [another expert witness called by the plaintiff] on July 13, 2004" and that "PIC did not appear with counsel at those hearings."

¶ 8. On the basis of the facts as it found them, the circuit court determined that PIC's neglect was not excusable. The circuit court thus denied PIC's motion to enlarge the time in which to file and serve an answer and granted the plaintiffs motion to strike the answer that PIC had served untimely.

¶ 9. In the petition for review filed with this court, PIC declined to contest that it is in default for its failure to serve an answer timely. PIC concedes before this court that its failure to serve an answer timely cannot be excused under the circumstances of the present case; that the circuit court properly denied PIC's motion to enlarge the time in which to serve and file an answer; and that the circuit court properly granted the plaintiffs motion to strike PIC's untimely answer. In short, PIC concedes that it is in default, that is, that PIC has failed without excuse to join issue of law or fact.

II

¶ 10. We turn now to the issue to be decided in the instant case. PIC's petition presents only a single issue for review by this court. That issue pertains to the legal effect of PIC's now-acknowledged default. We decide in the present case this single issue of law that PIC has presented for our review. We do not address or decide any issues decided in the circuit court or court of appeals but not raised in PIC's petition to this court.

¶ 11. The issue that PIC presents in its petition to this court may be stated as follows: Did the answer served timely by PIC's codefendant insureds denying the liability of all defendants inure to PIC's benefit so as to preclude, as a matter of law, a judgment by default against PIC for the plaintiffs damages, notwithstanding PIC's acknowledged default?

¶ 12. PIC contends that because the timely answer of its codefendant insureds denied the liability of all defendants, the effect of PIC's default is limited and partial as a matter of law. PIC asserts that it remains entitled to a trial on the issue of its insureds' causal negligence and PIC's liability to the plaintiff. According to PIC, its default only precludes PIC from contesting that it had at all times material a policy of insurance in full force and effect that provided coverage to PIC's codefendant insureds for malpractice claims of the kind alleged by the plaintiff. In other words, PIC argues that the effect of PIC's default is to admit only its unconditional coverage for the codefendant insureds.

¶ 13. We affirm the decision of the court of appeals. We conclude that the circuit court did not err as a matter of law in rendering a judgment by default against PIC for the plaintiffs damages. We determine, as did the circuit court and the court of appeals, that the timely answer of the codefendant insureds denying the liability of all defendants did not, as a matter of law, preclude a judgment by default against PIC on the issue of liability and damages upon PIC's acknowledged default. We hold that PIC's acknowledged default subjected PIC to a judgment by default for the plaintiffs damages against it.

¶ 14. Accordingly, we affirm the decision of the court of appeals affirming the circuit court's default judgment against PIC for damages.

III

¶ 15. We briefly summarize the facts relevant to the issue that PIC presents for review.

¶ 16. Dale Otto, Shelley Otto, and Ashley Otto filed a complaint against two medical doctors, the clinic employing the doctors, the doctors' and clinic's fictitious insurers, and the Wisconsin Patients' Compensation Fund. The complaint pled, inter alia, causes of action for recovery of damages allegedly caused by the doctors' negligence. Dale Otto died not long after the complaint was filed.

¶ 17. Upon Otto's death, an amended complaint was filed substituting the Estate of Dale Otto for Otto personally and adding Amanda Otto as a named plaintiff. The amended complaint also substituted PIC for the fictitious insurers named in the original complaint and alleged that PIC had, in full force and effect at all material times, a policy of insurance covering the doctors and their employer for the damages alleged by the plaintiff.

¶ 18. The amended complaint pled causes of action for medical negligence not only against the codefendant doctors but also directly "against . . . Physicians Insurance Company of Wisconsin, Inc. . . . ." The plaintiffs amended complaint alleged that PIC's codefendant insureds were negligent causing damages to the plaintiff and that "Physicians Insurance Company of Wisconsin, Inc. . . . [is] directly liable to Plaintiffs in an amount to be proven at trial."

¶ 19. Attorney Guy DeBeau served and filed an answer to the amended complaint on behalf of the doctors and the doctors' employer on November 5, 2003. The answer of the doctors and their employer denied the plaintiffs allegation that the doctors were negligent or that they had caused damages to the plaintiff. Although the answer was not filed or served on behalf of PIC, the answer specifically denied PIC's liability to the plaintiffs for any damages; admitted that PIC "had at a time material hereto a policy of insurance in full force and effect which provided coverage to [the doctors and the doctors' employer] for claims of the nature alleged by the plaintiffs"; and "specifically aver [red] that the extent of coverage provided under said policy is limited by the terms and conditions of said policy. . . ."

¶ 20. The plaintiff served PIC the amended complaint and summons on November 20, 2003, fifteen days after the codefendant insureds had served and filed their answer. The plaintiff initially asked Attorney DeBeau to admit service of the amended summons and complaint on behalf of PIC. For reasons unclear from the record, Attorney DeBeau declined. The plaintiff ultimately served PIC personally through its vice-president of claims.

¶ 21. The amended summons informed PIC that "[w]ithin 45 days of receiving th[e] summons," PIC would be required to "respond with a written answer, as that term is used in Chapter 802 of the Wisconsin Statutes, to the complaint." The amended summons further advised PIC that if it did "not provide a proper answer within 45 days, the court may grant judgment against you for the award of money or other legal action requested in the complaint."

¶ 22. PIC answered some eight months later. On August 23, 2004, PIC answered in the form of an amended answer served and filed by Attorney DeBeau on behalf of the doctors, their employer, and the defendant. PIC's answer was untimely.

¶ 23. The plaintiff moved for judgment by default against PIC and for an order striking PIC's answer. PIC moved for an order enlarging the time to file and serve its answer. The circuit court denied PIC's motion for an order enlarging the time to file and serve its answer, finding that PIC's failure to answer timely was not the result of excusable neglect. See Wis. Stat. § (Rule) 801.15(2)(a). The circuit court then ordered that PIC's untimely answer be struck and that judgment by default be entered against it.

¶ 24. In a brief filed subsequent to the circuit court's order for the entry of default judgment, PIC argued to the circuit court that its default had the sole effect of rendering PIC "estopped from asserting its policy defenses." PIC argued that its default could not preclude PIC from litigating the plaintiffs allegation that the doctors insured by PIC negligently caused damages to the plaintiff. Although the circuit court had already granted the plaintiffs motion for default judgment, PIC argued that the remedy of a default judgment was not available to the plaintiff under the circumstances of the present case.

¶ 25. The circuit court rejected PIC's argument and determined that PIC's default made it subject to a judgment by default for the plaintiffs damages. The circuit court scheduled a hearing to determine the amount of the plaintiffs damages.

¶ 26. After the circuit court determined that PIC would be liable by its default for the plaintiffs damages, the circuit court ordered the codefendant insureds dismissed upon a stipulation between the plaintiff and the insureds. Under the terms of the circuit court's order of dismissal, all claims against the codefendant insureds were dismissed without prejudice and without costs to any party, and the plaintiff covenanted not to refile the action for the remainder of the applicable limitations period. The circuit court's order also provided that no finding would be made as to whether the defendant doctors had been negligent or had demonstrated unprofessional conduct.

¶ 27. After conducting a hearing on damages, the circuit court rendered judgment by default against PIC for the plaintiffs compensatory damages, plus fees, costs, and interest.

IV

¶ 28. We address PIC's argument that the timely answer of the codefendant insureds denying the liability of all defendants inured to PIC so as to preclude a judgment by default against PIC notwithstanding PIC's acknowledged default.

¶ 29. The decision whether to grant a motion for judgment by default lies within the sound discretion of the circuit court. In reviewing a circuit court's discretionary decision, an appellate court decides questions of law imbedded in the circuit court's exercise of discretion independently of the circuit court but benefiting from its analysis. The issue presented in the instant case requires this court to interpret and apply rules of pleading, practice, and procedure adopted by this court pursuant to Wis. Stat. § 751.12. Interpretation of these rules presents a question of law that this court determines independently of the circuit court and court of appeals but benefiting from their analyses.

¶ 30. PIC makes the following arguments in support of its position that the timely answer of the codefendant insureds denying the liability of all defendants inured to it so as to preclude, as a matter of law, a judgment by default against it notwithstanding its acknowledged default: (A) PIC's default cannot establish its liability, because its liability is completely dependent upon the liability of its codefendant insureds and PIC thus cannot admit by its default the negligence of its codefendant insureds; (B) Wisconsin law supports PIC's position; (C) Case law from other jurisdictions supports PIC's position; (D) Case law from other jurisdictions demonstrates that the circuit court's default judgment against the defendant improperly invited inconsistent outcomes in the action; and (E) Public policy considerations support limiting the effect of PIC's default to an admission of unconditional coverage. We reject each argument in turn.

A

¶ 31. PIC's first argument is that its liability is completely dependent upon the liability of its codefendant insureds and that it therefore cannot admit by its default the negligence of its codefendant insureds. We conclude that this argument is contrary to Wis. Stat. § 632.24, Wisconsin's "direct action" statute.

¶ 32. The direct action statute provides that any liability policy covering negligence makes the insurance company liable to the person entitled to recover against the insured up to the policy limits. Under the direct action statute, the complaining party may allege the insured's conduct, and the insurer's liability therefor, directly against the insurer. The statute renders the insurer "directly liable" for the conduct of its insured. "[J]udgment may be directly against the insurer and . . . payment must be made directly to the injured party." In addition, the insured is not a necessary party to the action brought against its insurer.

¶ 33. Section 632.24 provides in full as follows:

DIRECT ACTION AGAINST INSURER. Any bond or policy of insurance covering liability to others for negligence makes the insurer liable, up to the amounts stated in the bond or policy, to the persons entitled to recover against the insured for the death of any person or for injury to persons or property, irrespective of whether the liability is presently established or is contingent and to become fixed or certain by final judgment against the insured.

¶ 34. The text of the direct action statute contradicts PIC's assertion that PIC's liability is "completely dependent on [its insureds'] liability." The statute expressly states that an insurer may be liable "irrespective of whether the liability is presently established or is contingent and to become fixed or certain by final judgment against the insured."

¶ 35. An insurer's liability is, of course, dependent upon the conduct of its insured, but the insurer's liability is not necessarily dependent on the insured's liability. There can be no recovery against the insurer unless the insured's conduct giving rise to liability is proven.

¶ 36. Our cases interpreting and applying the direct action statute establish that "[t]he responsibility of an insurance company to an injured party is derivative of the insured's conduct, but it is not derivative of the status of the insured's personal liability to a plaintiff. . . ." The case law further establishes that liability may be imposed "upon the insurer irrespective of whether there is a final judgment against the insured." Indeed, under certain circumstances, the insurer may be subject to a judgment against it even when recovery against the insured is precluded by law.

¶ 37. Kujawa v. American Indemnity Co., 245 Wis. 361, 14 N.W.2d 31 (1944), provides one such example. This court held in Kujawa that Kujawa could proceed with a properly commenced action against a defendant insurer although recovery against the tortfeasor-insured was barred under the applicable statute of limitations.

¶ 38. Kujawa sued American Indemnity for damages that Kujawa suffered in an automobile accident allegedly caused by the tortious conduct of American Indemnity's insured. Kujawa did not bring action against the tortfeasor-insured. After Kujawa's action was commenced, the time allotted under the applicable statute of limitation expired, barring Kujawa's cause of action against the tortfeasor-insured. The trial court granted American Indemnity's motion for summary judgment against Kujawa, holding that "[t]here being no liability on the part of [the insured] then there is no liability on the part of the insurance carrier because under its contract there is no one to indemnify"

¶ 39. This court reversed the trial court's decision, permitting Kujawa to proceed with the cause of action against American Indemnity, although the insured could not be liable to Kujawa. The court stated that under the Wisconsin direct action statute, Kujawa was entitled to pursue the cause of action against the defendant insurer alone. So long as Kujawa had a cause of action against the insured at the time the action was commenced, further discussion about the statute of limitation was, according to this court, "unnecessary." It was of no moment that Kujawa's action could result in recovery against American Indemnity when the statute of limitation would bar any recovery against the insured.

¶ 40. A necessary corollary of the insurer's direct liability to an injured complainant is that the insurer may admit an allegation of its liability, as well as the underlying allegation of the tortious conduct of its insured. When the action is brought directly against the insurer and the insured is not a party to the action, the insurer must have the ability to admit or deny the plaintiffs allegations as the insurer sees fit.

¶ 41. The plaintiff in the present case pled causes of action for medical negligence directly against PIC. The plaintiff alleged, directly against PIC, that PIC's insureds negligently caused damages to the plaintiff and that PIC was "directly liable" to the plaintiff due to the causal negligence of its insured. PIC was obligated to answer these allegations.

¶ 42. The ordinary rule is that the allegations in a complaint "are admitted when not denied" in the answer of a defendant against whom the allegations are made. Furthermore, when a defendant is determined to be in default, the factual allegations against the defendant, except those relating to the amount of damages, ordinarily are deemed true. Nothing in the nature of an insurer's liability to the plaintiff serves to impair the operation of these general rules.

¶ 43. Although we conclude that the direct action statute shows that PIC may admit by its default the negligence of its codefendant insureds and its own consequent liability to the plaintiff, we do not conclude that the direct action statute shows that PIC's default must constitute such an admission under the circumstances of the present case. The plaintiff in the present case brought action not only against PIC but also against PIC's insureds, who answered timely denying the liability of all defendants. The direct action statute does not speak to the question whether the timely answer of an insured denying liability may inure to the benefit of a defaulting insurance company so as to preclude a judgment by default against it for the plaintiffs damages. We examine PIC's other arguments supporting its position that an insured's answer inures to the benefit of a defaulting insurance company when the insured's liability has not been determined and the insured is dismissed from the case.

B

¶ 44. PIC's second argument is that Wisconsin law demonstrates that despite PIC's default, PIC can take advantage of its insureds' denial of negligence. We disagree with PIC. The effect of PIC's acknowledged default was to expose PIC to a judgment by default against it for damages.

¶ 45. We begin with Wis. Stat. § (Rule) 806.02, governing default judgment cases. Default judgment may be rendered if no issue of law or fact has been joined and if the time for joining issue has expired. Sections (Rules) 806.02(1) and (2), which are relevant to the present case in which PIC defaulted for failure to answer timely, provide in full as follows:

(1) A default judgment may be rendered as provided in subs. (1) to (4) if no issue of law or fact has been joined and if the time for joining issue has expired. Any defendant appearing in an action shall be entitled to notice of motion for judgment.

(2) After filing the complaint and proof of service of the summons on one or more of the defendants and an affidavit that the defendant is in default for failure to join issue, the plaintiff may move for judgment according to the demand of the complaint. If the amount of money sought was excluded from the demand for judgment, as required under s. 802.02 (1m), the court shall require the plaintiff to specify the amount of money claimed and provide that information to the court and to the other parties prior to the court rendering judgment. If proof of any fact is necessary for the court to give judgment, the court shall receive the proof.

¶ 46. Sections (Rules) 806.02(1) and (2) are, on their face, inconsistent with PIC's position that the answer of its codefendants denying the liability of all defendants precludes a judgment by default against PIC for damages.

¶ 47. Subsection (1) expressly authorizes the circuit court to render a judgment by default in circumstances when, as in the present case, "no issue of law or fact has been joined and . . . the time for joining issue has expired." PIC concedes that it has failed in the present case to join issue of law or fact and that the time for joining issue has expired.

¶ 48. Moreover, although subsection (1) expressly contemplates cases involving multiple defendants ("Any defendant appearing in an action shall be entitled to notice of motion for judgment. . . ."), the text of the subsection does not suggest that there may be circumstances in which one defendant may join issue of fact or law on behalf of another. The plain language of § (Rule) 806.02(1) thus seems to render a defendant subject to a default judgment against it for its failure to join issue of law or fact.

¶ 49. Subsection (2) further reinforces the concept that the effect of a defendant's default is to make available the remedy of a judgment by default against the defendant. Subsection (2) plainly states that when a defendant is in default for failure to join issue, "the plaintiff may move for judgment according to the demand of the complaint." Nothing in the text of subsection (2) suggests that the plaintiffs right to move for judgment against a defendant in default may be conditional upon the content of an answer served timely by a codefendant not in default.

¶ 50. Significantly, the default judgment statute provides no circumstances in which a party is in default and yet is exempt as a matter of law from the provisions of the default judgment statute. PIC's argument is essentially that such an exemption does exist: PIC concedes that it is in default in the present case yet denies that a default judgment may be rendered against it under the default judgment statute. We see no textual basis for recognizing the exemption proposed by PIC.

¶ 51. In addition to the default judgment statute, we look to Wis. Stat. § (Rule) 802.02, which governs pleadings. We examine, in particular, Wis. Stat. § (Rule) 802.02(2) and (4), setting forth general rules for denying allegations in the plaintiffs complaint and specifying the effect of a defendant's failure to deny such allegations. These subsections provide in full as follows:

(2) DEFENSES; FORM OF DENIALS. A party shall state in short and plain terms the defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies. If the party is without knowledge or information sufficient to form a belief as to the truth of an averment, the party shall so state and this has the effect of a denial. Denials shall fairly meet the substance of the averments denied. The pleader shall make the denials as specific denials of designated averments or paragraphs, but if a pleader intends in good faith to deny only a part or a qualification of an averment, the pleader shall specify so much of it as is true and material and shall deny only the remainder.

. . . .

(4) EFFECT OF FAILURE TO DENY. Averments in a pleading to which a responsive pleading is required, other than those as to the fact, nature and extent of injury and damage, are admitted when not denied in the responsive pleading, except that a party whose prior pleadings set forth all denials and defenses to be relied upon in defending a claim for contribution need not respond to such claim. Averments in a pleading to which no responsive pleading is required or permitted shall be taken as denied or avoided.

¶ 52. Like the default judgment statute, Wis. Stat. § (Rule) 802.02(2) and (4) are inconsistent with PIC's position in the present case. The text of these provisions belies the premise, implicit in PIC's argument, that PIC is justified in assuming that a codefendant's answer denying common allegations in the plaintiff's complaint has the effect of permitting it to forgo responding to those same allegations without repercussion.

¶ 53. Subsection (2) establishes a defendant's duty to respond to the plaintiffs pleadings without qualifying this duty by reference to the responsive pleadings of a codefendant. Section (Rule) 802.02(2) simply mandates that " [a] party shall state in short and plain terms the defenses to each claim asserted and shall admit or deny the averments upon which the adverse party relies" (emphasis added). Nothing in the text of subsection (2) suggests that this clear language requiring a party to admit or deny the plaintiffs averments may not apply when a codefendant of the party has denied an averment on behalf of the party.

¶ 54. Wisconsin Stat. § (Rule) 802.02(4) also stands in clear and direct contradiction to PIC's position in the present case. Subsection (4) establishes that averments in a plaintiffs complaint are deemed to be admitted when not denied in a defendant's responsive pleading, with certain exceptions. These exceptions, applying when an averment pertains "to the fact, nature and extent of injury and damage" or when the defendant's "prior pleadings set forth all denials and defenses to be relied upon in defending a claim for contribution," do not include the exception that PIC seeks in the present case. Section (Rule) 802.02(4) does not suggest that the general rule stated therein cannot apply when the averment is denied in the separate responsive pleading of a codefendant.

¶ 55. Wisconsin Stat. § (Rule) 802.02(4) demonstrates that PIC's default made a judgment against it appropriate within the discretion of the circuit court. In support of causes of action pled directly against PIC, the plaintiff alleged that PIC's insureds were negligent causing damages to the plaintiff and that PIC is "directly liable" to the plaintiff for these damages. PIC, in failing to deny this allegation of its liability in a timely answer, admitted it. With the issue of liability resolved by virtue of PIC's default, only the amount of damages was left to be determined before entry of judgment against PIC.

¶ 56. Moreover, PIC's position is contrary to Wis. Stat. §§ (Rules) 802.06(1) and 802.09(1). These provisions establish PIC's unequivocal duty to serve its answer timely to the complaint served against it. Our precedent recognizes the importance of these provisions. We have held that "[t]he Wisconsin rules expect that answers will be timely served and promptly filed. Courts ought to have authority to impose a serious sanction for failure to timely `serve,' and an appropriate sanction, however modest, for failure to file `within a reasonable time after service.'"

¶ 57. PIC's position does not comport with the statutory provisions imposing a duty to serve an answer timely or with our case law recognizing the circuit court's authority to impose a serious sanction for failure to serve an answer timely.

¶ 58. PIC suggests that the consequence of its default in the present case is merely an admission of unconditional coverage. This consequence, however, is no consequence at all when the insurer's obligation to insure the matter (and the extent of this obligation) is not contested. PIC concedes that insurance coverage is clear and that it never contested coverage and never intended to contest coverage.

¶ 59. The rule PIC proposes would render the mandatory provisions of Wis. Stat. §§ (Rule) 802.06(1) and 802.09(1) virtually optional in cases in which the insurer indisputably provides coverage for the damages alleged in the plaintiffs complaint.

¶ 60. Martin v. Griffin, 117 Wis. 2d 438, 440, 344 N.W.2d 206 (Ct. App. 1984), is germane to the present case. In Martin, the court of appeals sustained a default judgment on facts and issues not significantly distinguishable from those of the present case.

¶ 61. In the Martin case, Martin brought action against Griffin, Aetna Casualty (insurer of the vehicle operated by Griffin), and Milbank Mutual (Griffin's personal insurer), alleging that Griffin's negligence caused $150,000 in damages to Martin. Aetna Casualty answered timely on behalf of itself and Griffin, denying that Griffin was negligent and alleging that the accident was caused by Martin's negligence. Milbank Mutual's answer was not timely. The circuit court struck Milbank Mutual's untimely answer, dismissed Milbank Mutual's codefendants from the action, and entered a judgment by default against Milbank Mutual in the amount of $150,000.

¶ 62. Relevant to the present case, Milbank Mutual argued on appeal that the circuit court erroneously exercised its discretion in striking Milbank Mutual's untimely answer and granting a default judgment against it for damages. Milbank Mutual contended that its failure to answer timely was due to excusable neglect, explaining that the claims supervisor responsible for handling Martin's complaint had "concluded erroneously that Aetna's answer was sufficient to protect Milbank and its insured," given that "Aetna was the primary insurer and provided coverage exceeding the damages demanded in the complaint." Milbank Mutual further explained that it generally wrote no coverage "in Wisconsin or in any state allowing insurance companies to be sued directly or requiring them to answer complaints involving their insureds."

¶ 63. The Martin court of appeals affirmed the circuit court's default judgment for damages, holding that "[i]t is not excusable neglect, as a matter of law, for an insurance company to fail to file a timely answer due to the good faith belief of its personnel that, since there appeared to be a primary insurer with coverage exceeding damages alleged in the complaint, Wisconsin law did not require it to answer."

¶ 64. The facts of Martin are not significantly distinguishable from those of the present case. In Martin, Milbank Mutual's codefendant Aetna Casualty answered timely on behalf of itself and the defendant insured, denying Martin's allegation that the defendant insured was negligent. In the instant case, the codefendant insureds similarly answered timely on their own behalf, denying the plaintiffs allegation of negligence. There is no principled reason that PIC should be spared a default judgment against it when the default judgment against Milbank Mutual was sustained despite the timely answer of Milbank Mutual's codefendant denying negligence on the part of Milbank Mutual's codefendant insured.

¶ 65. The arguments set forth by the defendant insurers in Martin and the instant case, although structured differently, are essentially the same for purposes of the present case. The position of PIC in the present case, like the position of the defendant insurer in Martin, rests upon the premise that the timely answer of a codefendant may have the effect of precluding judgment by default against a defendant insurer who fails to answer timely. In Martin, Milbank Mutual argued that it could excusably rely upon the timely answer of its codefendant so as to avoid a default situation (and thus also to avoid a default judgment). PIC concedes its default but argues that, even in default, it is entitled to rely upon the timely answer of its codefendant to avoid a default judgment.

¶ 66. Indeed, PIC's argument in the present case seems to be a more ambitious version of the argument that Milbank Mutual set forth in Martin. Milbank Mutual contended only that its reliance upon the answer of its codefendant, although erroneous, was excusable. PIC asserts a right to rely (in default) upon the answer of its codefendant. What Milbank Mutual claimed as an excuse, PIC in the instant case claims as an entitlement.

¶ 67. In sum, the Martin court of appeals' decision sustaining the circuit court's default judgment against Milbank Mutual strongly supports the default judgment rendered against PIC. It makes little sense for PIC to be spared a default judgment for damages against it when Milbank Mutual was subject to a default judgment despite the timely answer of Milbank Mutual's codefendant denying that Milbank Mutual's insured was negligent.

¶ 68. PIC attempts to distinguish Martin on the ground that the defendant insured in Martin failed to answer and was in default. PIC asserts that the insured in Martin "failed to answer" and that "[t]herefore, there was no answer denying negligence that could have inured to the benefit of Millbank [sic]." PIC further asserts that the court of appeals "addressed the effect of [Milbank Mutual's] default separate from the [defendant insured's] default." PIC argues that it was "the effect of the insured's default . . .," not the effect of Milbank Mutual's default, "to establish [the insured's] negligence."

¶ 69. PIC's account of Martin is inaccurate. The Martin court of appeals expressly referenced the answer of Aetna Casualty, Milbank Mutual's codefendant. Although the Martin opinion is silent as to the content of Aetna Casualty's answer, Milbank Mutual's brief to the court of appeals stated that "the answer denied that [the] defendant [insured] was negligent and alleged that the accident was caused by the plaintiffs negligence." PIC's assertion that there was no answer in Martin denying the insured's negligence that could have inured to the benefit of Milbank Mutual is not correct, according to the opinion and briefs in the Martin case.

¶ 70. PIC is also incorrect in asserting that the defendant insured in Martin was in default. Milbank Mutual's brief to the court of appeals stated that "Aetna Casualty and Surety Company interposed an answer on behalf of itself and defendant John Francis Griffin, III [the insured]." Nowhere in its opinion did the Martin court of appeals suggest that any defendant other than Milbank Mutual had failed to answer timely or was in default.

¶ 71. PIC additionally directs our attention to statements in the Martin opinion that PIC interprets as limiting the effect of Milbank Mutual's default to an admission of unconditional coverage. Early in its opinion, the Martin court of appeals stated that "[w]ithout a valid answer, Milbank is deemed by law to have admitted, without qualification, Martin's allegation that it covered Griffin's liability for negligence." A similar statement also appears later in the opinion: "By failing to file a timely answer of denial, Milbank has admitted the unconditioned allegation that its policy covered [the insured] for liability for damages caused by his negligence." PIC argues that these statements show that the court of appeals perceived Milbank Mutual's default to result solely in an admission of unconditional coverage, not in an admission of its insured's negligence or in liability.

¶ 72. We disagree with PIC's interpretation of these statements in the Martin opinion. The court of appeals' assertions about Milbank Mutual's default constituting an admission of coverage were clearly directed at Milbank Mutual's argument that despite its default, Milbank Mutual's liability should be limited according to provisions in its policy with the insured limiting Milbank Mutual's coverage to damages in excess of those that Aetna Casualty (the primary insurer) was obligated to cover. It is unsurprising that the court of appeals responded to Milbank Mutual's contention that it could argue for limited coverage even in default by holding that Milbank Mutual's default constituted an admission of unconditional coverage. Elsewhere in its opinion, the Martin court of appeals described the effect of Milbank Mutual's default more broadly: "Milbank has . . . waived its opportunity to argue issues of liability and the respective obligations of the two insurance companies." This language makes clear that the effect of Milbank Mutual's default was to establish both liability and unconditional coverage irrespective of Aetna's obligations.

¶ 73. Moreover, the Martin court of appeals' mandate affirming the default judgment against Milbank Mutual for damages necessarily implies that Milbank Mutual's default constituted a full-fledged admission of its liability to Martin. No other basis except Milbank Mutual's default existed for a judgment imposing liability on Milbank for the negligence of its insured. As we have stated, the allegation of negligence was denied, not admitted, in the timely answer of Milbank's codefendant. The default judgment against Milbank clearly would have been improper if Milbank's default had not established its liability.

¶ 74. The default judgment against PIC in the instant case is further supported by Gerth v. American Star Insurance Co., 166 Wis. 2d 1000, 480 N.W.2d 836 (Ct. App. 1992). Gerth represents another case in which the court of appeals sustained a default judgment on facts not significantly distinguishable from those considered here.

¶ 75. Gerth brought action against Reid Boiler Works and American Star, Reid Boiler's liability insurer. Although the opinion is silent on the matter, Reid Boiler Works apparently answered timely American Star failed to answer timely. The circuit court denied American Star's motion to extend the time for answering (finding no excusable neglect), granted Gerth's motion to strike American Star's untimely answer, and entered a judgment by default against American Star for damages. PIC correctly states that the Gerth opinion does not discuss whether an answer of a codefendant should inure to the benefit of the insurer. Gerth is about excusable neglect, an issue not before us in the present case. But the result in Gerth does not favor PIC.

¶ 76. Finally, we also find support in Pett v. Clark, 5 Wis. 198 (1856). In Pett, the circuit court entered a default, and ultimately rendered a default judgment, against defendants Reynolds and Clark. Reynolds, however, previously had filed a plea that was not struck and that remained in the court's record.

¶ 77. On appeal, the Wisconsin Supreme Court held that when a plea was on file with the circuit court, "a default could not be entered against the defendant pleading it." Relevant to the instant case, here the default judgment was not entered against the insureds who had filed an answer. The insureds in the instant case voluntarily agreed to be dismissed from the case. The Pett court did not hold that the defendant with no plea on file, here PIC, was immune to the entry of a default.

¶ 78. PIC adduces two Wisconsin cases that it characterizes as in its favor: Leonard v. Cattahach, 214 Wis. 2d 236, 571 N.W.2d 444 (Ct. App. 1997), and Haugen v. Wittkopf, 242 Wis. 276, 7 N.W.2d 886 (1943). However, neither Leonard nor Haugen is on point in the present case.

¶ 79. The Leonards brought action against defendants Sandra Conley and DuPont Mutual (Conley's insurer), alleging that Conley negligently caused damages to the Leonards. Conley answered timely, denying the Leonards' allegation of negligence and asserting a cross-claim against a codefendant who also allegedly negligently caused damages to the Leonards. DuPont Mutual failed to answer timely. The circuit court struck DuPont Mutual's untimely answer and entered a judgment by default against it for damages.

¶ 80. Relevant to the instant case, DuPont Mutual argued on appeal that even assuming its answer was properly stricken, the circuit court erred by entering final judgment for damages in excess of DuPont Mutual's policy limits. DuPont Mutual contended that the circuit court should have taken account of DuPont Mutual's policy limits, because Conley's [the insured's] answer stated that DuPont Mutual's policy of insurance had terms and limitations on DuPont Mutual's obligation to pay The court of appeals rejected this argument, refusing to presume that Conley's answer "was meant by Conley to plead DuPont's policy limits and thereby increase her exposure, if damages proved to be greater than those limits." The court of appeals affirmed the judgment by default for damages in excess of policy limits entered against DuPont Mutual.

¶ 81. Although it affirmed the circuit court's default judgment, which necessarily implied that DuPont Mutual's default established DuPont Mutual's liability to the Leonards, the court of appeals questioned (without deciding) whether DuPont Mutual's default indeed had such an effect. In a footnote, the Leonard court of appeals stated as follows:

Although the Leonards' complaint alleged only that DuPont had an obligation to pay "all sums which Sandra K. Conley might become legally obligated to pay," DuPont did not argue to the circuit court, and has not argued to us, what effect Conley's answer, which denied negligence and asserted a cross-claim against [a codefendant], had on the apportionment of negligence and thus on DuPont's exposure to damages. Therefore, we do not address that issue. . . ."

¶ 82. In Leonard, the court of appeals and the parties did not directly deal with the issue of whether an insured's answer should benefit the insurer. The result in Leonard, however, does not favor PIC.

¶ 83. Haugen, 242 Wis. 276, the remaining Wisconsin case relied on by PIC, is also not on point in the present case. Haugen was not a default judgment case and did not involve a defendant's failure to answer denying any allegation.

¶ 84. Haugen brought action against Wittkopf and his insurer, seeking recovery for injuries Haugen sustained as a passenger in a vehicle operated by Wittkopf. Wittkopf answered timely, asserting as an affirmative defense that Haugen had assumed (by acquiescence) any risk incident to Wittkopf's negligence. The insurer also answered timely but did not assert the affirmative defense asserted by Wittkopf. Trial was had to a jury, which found that Haugen had not assumed the risk incident to Wittkopf's negligence. Wittkopf and the insurer appealed together, arguing that Haugen had assumed the risk incident to Wittkopf's negligence as a matter of law.

¶ 85. This court agreed with Wittkopf and his insurer and reversed the judgment of the circuit court. Relevant to the present case, this court then considered Haugen's argument that Wittkopf's insurer was "not entitled to the benefit of [Haugen's] assumption of risk, because it [the insurer] did not plead it as a defense." Assuming (without deciding) that such defense could be raised only by pleading, this court held that the insurer's failure to raise the defense in its answer was immaterial. The Haugen court explained that the insurer's liability was "to indemnify [Wittkopf] and as Wittkopf is not liable the insurer is not and there can be no recovery against it."

¶ 86. Haugen stands for the proposition that when the insured and the insurer are parties and each answers timely, the insurer cannot be held liable when the plaintiff fails to prove on the merits that the insured's conduct provides a basis for liability.

¶ 87. Haugen is of limited relevance to the present case. Wittkopf's insurer did not fail to answer timely or to deny Haugen's allegation of liability. Haugen addresses a different issue: the effect of an insurer's failure to plead an affirmative defense that the insured successfully used. Wittkopf's insurer was spared judgment because Wittkopf succeeded at trial in showing that his conduct provided no basis for his liability or that of his insurer.

¶ 88. The Haugen court did not address the hypothetical question whether Wittkopf's answer denying liability would have precluded a judgment by default against the insurer if the insurer had failed to answer Haugen's complaint timely. Likewise, we do not address here the hypothetical case in which PIC's codefendant insureds succeeded in showing at trial that their conduct did not provide a basis for their or PIC's liability.

C

¶ 89. PIC argues that case law from other jurisdictions supports PIC's position in the present case that despite its default PIC can take advantage of its insureds' denial of negligence. The cases PIC cites all apply some version of the "common defense" doctrine. According to the common defense doctrine, "[t]he answer of the codefendant inures to the benefit of a defaulting defendant where there exists a common defense as to both of them."

¶ 90. The cases reveal substantial variation in the manner in which the "common defense" doctrine is applied. The cases also provide little, if any, support to PIC. Indeed, the cases upon which PIC relies appear to show that the position advanced by PIC is one unknown to the law of any jurisdiction.

¶ 91. PIC begins its examination of the cases of other jurisdictions with discussion of a Florida case, Rothman v. Hebebrand, 720 So. 2d 595 (Fla. Dist. Ct. App. 1998). Rothman, however, is distinguishable from the present case. Furthermore, the version of the "common defense" doctrine applied by the Florida courts would be of no avail to PIC even if the doctrine did apply to the present case.

¶ 92. In the Rothman case, Hebebrand sued Rothman (a medical doctor) and his professional association for damages allegedly stemming from Rothman's medical malpractice. The professional association defaulted and judgment was entered against it. The action proceeded against Rothman, who prevailed before the jury. On appeal, the professional association argued that because the association's liability could only be vicarious, the trial court had erred in refusing to set aside its default after Rothman was exonerated of liability.

¶ 93. The Florida Court of Appeals held for the professional association. The Rothman court of appeals relied on a line of Florida cases holding that "if the liability of a defaulting defendant is completely dependent upon the liability of a non-defaulting codefendant, a final judgment should not be entered against the defaulting defendant unless the codefendant has been found liable."

¶ 94. Rothman is distinguishable from the present case. In Rothman, the defaulting party's liability is vicarious. In the present case the insurer's liability is not completely dependent on the liability of a non-defaulting defendant. Rather, the insurer's liability depends on the insured's conduct. The action in the present case against the codefendant insureds did not proceed to jury; the codefendant insureds in the present case have not been exonerated by a jury. Rothman is more like Haugen, 242 Wis. 276, in that a codefendant insured obtained a judgment in its favor showing that the insured's conduct could not provide a basis for the insurer's liability to the plaintiff. Unlike in Rothman or Haugen, PIC's codefendant insureds stipulated to their dismissal from the action and did not obtain a judgment showing that their conduct could not provide a basis for PIC's liability.

¶ 95. More importantly, application of the Florida "common defense" rule would be of no avail to PIC given the procedural facts of the instant case. Although the Florida courts recognize that a defaulting defendant may escape a default judgment when its liability is completely dependent upon the liability of a non-defaulting codefendant, the Florida courts do not appear to go so far as to permit the defaulting defendant to continue participating in the litigation despite its default. For example, in Days Inns Acquisition Corp. v. Hutchinson, 707 So. 2d 747, 751 (Fla. Dist. Ct. App. 1997), the Florida Court of Appeals reversed the entry of a final default judgment against Days Inns because no determination had been made on the merits of the plaintiffs claim against a non-defaulting codefendant. The Florida Court of Appeals then noted as follows: "By this opinion we do not imply that Days Inns can participate as a party or otherwise defend against plaintiffs claim against [the non-defaulting defendant]."

¶ 96. Were this court to apply the Florida rule faithfully, PIC in the present case could not participate in the action as a party defendant at the circuit court level on the issue of negligence and liability.

¶ 97. PIC's inability to participate further in the action on the issue of negligence and liability in the circuit court would render meaningless PIC's request that this court remand the matter to the circuit court for "further proceedings so the disputed negligence and damage allegations can be tried on the merits." PIC is the sole defendant remaining in the action. The codefendants were dismissed by order of the circuit court, an order from which PIC has declined to appeal. With PIC unable to participate in the action on the issue of negligence and liability, a circuit court has no "further proceedings" to conduct.

¶ 98. At least one jurisdiction, Arkansas, seems to permit a defaulting defendant to carry on as a participant when a codefendant has answered timely and asserted a defense common to all the defendants. It appears that under Arkansas law, the timely answer of a codefendant asserting a common defense altogether cures the default problem. For example, in Suiter v. Payne 989 S.W.2d 887 (Ark. 1999), the Arkansas Supreme Court held that "[b]ecause [the timely answer of a codefendant] was still viable at the time that [the defaulting defendant] answered the petition . . . the trial court erred when it ruled that the common-defense doctrine did not apply. . . ." The Arkansas Supreme Court then stated its mandate in relevant part as follows: "Accordingly, we reverse the trial court's order striking [the untimely] answer. . . ." With its answer not struck, the dilatory party in Sutter could not be in default.

¶ 99. PIC cannot argue for adoption of the Arkansas rule under the circumstances of the present case. Under the Arkansas rule, the untimely answer is not struck, and the default is cured. PIC, however, concedes that the circuit court properly struck PIC's untimely answer and that PIC is in default in the present case.

¶ 100. The remaining cases cited by PIC fail to aid PIC's case. Many state the rule that a defaulting defendant may benefit from a codefendant's successful defense demonstrating that there can be no factual basis for the defaulting defendant's liability to the plaintiff. In the instant case no judgment has been obtained by a codefendant demonstrating that there is no factual basis for PIC's liability. Others appear to hold (like Suffer) that the timely answer of a codefendant prevents default.

¶ 101. No case cited by PIC appears to recognize the unusual rule that PIC asks this court to adopt in the present case: PIC concedes that it is in default and yet asserts that it is entitled to proceed indefinitely in the action as a party defendant on the issue of liability and damages.

D

¶ 102. PIC urges that case law from other jurisdictions demonstrates that the circuit court's judgment against it improperly invites inconsistent outcomes in the action. PIC argues that inconsistent outcomes remain possible because the circuit court dismissed the codefendant insureds without prejudice and without a finding regarding whether the insureds were negligent. PIC does not allege, however, error in the circuit court's order dismissing the codefendants from the action.

¶ 103. PIC relies principally upon Frow v. De La Vega, 82 U.S. 552 (1872), in contending that this risk of inconsistent outcomes renders the circuit court's judgment improper.

¶ 104. In Frow, De La Vega brought action against Frow and thirteen other defendants, alleging that eight of the defendants (including Frow) had jointly conspired to defraud De La Vega. Frow's codefendants answered timely, but Frow did not. The trial court entered a final decree against Frow. The action against Frow's codefendants, however, proceeded and was resolved to the disfavor of De La Vega and in favor of Frow's codefendants.

¶ 105. The United States Supreme Court held that it was error for the trial court to make a final decree against Frow while the cause proceeded undetermined against Frow's codefendants. The Frow Court explained that the circuit court's procedure risked that "there might be one decree of the court sustaining the charge of joint fraud committed by the defendants; and another decree disaffirming the said charge, and declaring it to be entirely unfounded, and dismissing the complainant's bill." The Court denounced such a result as "unseemly and absurd." Frow is interpreted in a number of ways. It can stand for the proposition that if at trial a defendant is exonerated and if a defaulting codefendant's liability depends on the liability of the former, the plaintiff cannot obtain a judgment from the latter defendant.

¶ 106. PIC argues that, like in Frow, "a significant possibility of inconsistent outcomes" remains in the present case. We disagree with PIC. The outcome for PIC (a judgment for damages against it) and the outcome for PIC's codefendant insureds (dismissal of the action against them with no finding of liability) are not necessarily inconsistent. PIC has not sought review of the dismissal. Liability may be imposed "upon the insurer irrespective of whether there is a final judgment against the insured."

¶ 107. Frow is not on point in the instant case. Unlike in Frow, the cause in the present case did not proceed against non-defaulting defendants. The circuit court dismissed all codefendants from the action and accepted the plaintiffs covenant not to refile the action within the applicable limitations period.

¶ 108. Moreover, even if Frow did apply, the rule stated therein would be of no avail to PIC. Under the Frow rule, PIC could not participate in any further proceedings that this court might order on remand. The Frow Court stated the effect of Frow's default as follows: "The defaulting defendant has merely lost his standing in court. He will not be entitled to service of notices in the cause, nor to appear in it in any way. He can adduce no evidence, he cannot be heard at the final hearing . . .,"

¶ 109. The Frow rule thus presents the same problem for PIC that the Florida rule does. Unsurprisingly, the Florida courts rely upon Frow in deciding their cases regarding defaulting defendants. Without PIC's participation in any further proceedings in the circuit court, there can be no further proceedings because no defendants would be present.

¶ 110. In sum, Frow does not support PIC's position that the circuit court's judgment was in error. Frow contradicts the defendant's position that a party may, despite its default, continue to participate in the action.

E

¶ 111. PIC's final argument is that public policy considerations support limiting, as a matter of law, the effect of PIC's default to an admission of unconditional coverage. PIC argues that as a matter of law the circuit court should have considered a lesser sanction than default judgment, such as a monetary sanction, under the circumstances of the present case.

¶ 112. Conflicting public policy considerations underlie our procedural rule requiring that responsive pleadings be timely served and our procedural rule authorizing circuit courts "to impose a serious sanction for failure to timely serve" an answer. On the one hand, prompt proceedings are important. On the other hand, litigants should have their day in court; default judgments are disfavored.

¶ 113. These conflicting public policies are set forth in Hedtcke v. Sentry Insurance Co., 109 Wis. 2d 461, 469, 326 N.W.2d 727 (1982).

¶ 114. We explained in Hedtcke that a circuit court grants a motion to enlarge the time in which to answer if the court "finds reasonable grounds for non-compliance with the statutory time period (which the statute and this court refer to as excusable neglect) and if the interests of justice would be served by the enlargement of time, e.g., that the party seeking an enlargement of time has acted in good faith and that the opposing party is not prejudiced by the time delay"

¶ 115. PIC does not fit into the Hedtcke analysis. PIC agrees that it does not fit into the first step set forth in Hedtcke, namely that its failure to answer timely was the result of excusable neglect. Thus PIC is not able to fit into the second part of Hedtcke's analysis, pertaining to the "interests of justice," that requires the circuit court to apply the conflicting public policies to the facts of the case before it. The Hedtcke court stated as follows: "If the motion [for enlargement of the time in which to answer] is made after the expiration of the specified time, an order enlarging the time for performing an act must be based on a finding of excusable neglect; when the circuit court determines that there is no excusable neglect, the motion must be denied."

¶ 116. PIC does not dispute that in the absence of a finding of excusable neglect, a circuit court shall deny a defendant's motion to enlarge the time in which to answer. PIC does not argue that after the circuit court has denied a defendant's motion to enlarge the time in which to answer, the circuit court is still required to weigh policy considerations prior to granting a motion for default judgment against the defendant.

¶ 117. In other words, PIC does not argue that the circuit court erred by failing to make, at some stage of the process, a discretionary determination regarding whether a default judgment against PIC is consistent with sound public policy or with the interests of justice. Rather, PIC's argument is that this court should hold that the circuit court was altogether precluded as a matter of law from rendering a default judgment for damages against PIC for serving a late answer when the plaintiff has not shown prejudice.

¶ 118. We cannot conclude that the circuit court's default judgment against PIC is inconsistent with sound policy as a matter of law. PIC has caused its own problems by its default without excusable neglect.

¶ 119. PIC agrees in this court that it failed to answer timely the complaint against it alleging the defendant's direct liability; that it has no excuse for its failure to answer the complaint timely; and that it is irreparably in default with no answer before the circuit court. Under these circumstances, we cannot hold that the circuit court's judgment of default awarding damages against PIC is inconsistent with sound public policy as a matter of law. We cannot conclude that the result in the present case gives undue weight to the policy of promoting prompt adjudication or insufficient weight to the policy of affording litigants a day in court whenever reasonably possible.

¶ 120. For the reasons set forth, we conclude that the timely answer of the codefendant insureds denying the liability of all defendants did not preclude a judgment by default against the defendant for damages upon its acknowledged default.

* * * *

¶ 121. We affirm the decision of the court of appeals affirming the circuit court's default judgment against PIC for damages. We conclude that the circuit court did not err as a matter of law in rendering a judgment by default against PIC for the plaintiffs damages. We determine, as did the circuit court and court of appeals, that the timely answer of the codefendant insureds denying the liability of all defendants did not preclude a judgment by default against PIC on the issue of liability and damages upon the PIC's acknowledged default. We hold that PIC's acknowledged default subjected PIC to a judgment by default for the plaintiffs damages against it.

¶ 122. Accordingly, we affirm the decision of the court of appeals affirming in part and reversing in part the judgment of the circuit court.

By the Court. — The decision of the court of appeals is affirmed.