¶ 63. (concurring). In my view, the majority is wrong about the law. By converting the holistic inquiry about "extraordinary *671circumstances" into a formulaic five-part test, it transforms ordinary cases into "extraordinary" ones and undermines the finality of judgments.
¶ 64. The majority is also wrong about the facts. Its assertion that Ratzel was "Zurich's attorney of record" is much too simplistic. It overlooks the potential for conflict of interest inherent in the dual representation advocated by the majority and ignores the facts of record which suggest that Zurich had a different attorney who was actually representing its underinsured motorist (UIM) defense. Accordingly, the "procedural irregularities" identified by the majority did not contribute to the default judgment and are irrelevant to the determination of whether relief is warranted.
¶ 65. When I examine the record, I conclude that the circuit court erroneously exercised its discretion— not because it failed to consider five interest of justice factors, but rather because it failed to balance the competing interests of finality and fairness. Considering a range of relevant factors, I conclude that relief is warranted under the facts of this case. Accordingly, I respectfully concur.
I
¶ 66. Extraordinary circumstances are not presented by the ordinary case. However, the analysis set forth by the majority transforms the ordinary case into the "extraordinary." The majority converts the holistic inquiry for "extraordinary circumstances" under Wis. Stat. § 806.07(1)(h) into a formulaic five-factor test. As a result, it disregards this court's warning that subsection (h) "should be used sparingly" and should not be interpreted "so broadly as to erode the concept of finality." State ex rel. M.L.B. v. D.G.H., 122 Wis. 2d 536, 550, 552, 363 N.W.2d 419 (1985).
*672¶ 67. Wisconsin Stat. § 806.07(1)(h) provides that a court can order relief from a judgment for "[ajny other reasons justifying relief from the operation of the judgment." The seminal case addressing the interpretation and application of subjection (h) is M.L.B., 122 Wis. 2d 536. There, this court explained that section 806.07 "attempts to achieve a balance between the competing values of finality and fairness." Id. at 542.
¶ 68. Unlike some of the other subsections in § 806.07(1), there is no time limit for bringing an action under subsection (h). "[T]he ground for granting relief is 'justice' and the time for bringing the motion is 'reasonable.'" Id. at 544-45. Therefore, if interpreted broadly, subsection (h) could significantly erode the finality of judgments.
¶ 69. Recognizing this concern, the M.L.B. court cautioned: "We are mindful — and the circuit courts should be mindful — that finality is important and that subsection (h) should be used sparingly." Id. at 550. "The court should not interpret extraordinary circumstances so broadly as to erode the concept of finality, nor should it interpret extraordinary circumstances so narrowly that subsection (h) does not provide a means for relief for truly deserving claimants." Id. at 552. Under subsection (h), a party is entitled to relief "only when the circumstances are such that the sanctity of the final judgment is outweighed by the incessant command of the court's conscience that justice be done in light of all the facts." Id. at 550 (emphasis omitted).
¶ 70. To achieve the delicate balance between fairness and finality, the court set forth the "extraordinary circumstances" standard. Id. at 549. It explained that subsection (h) "invokes the sensibilities of the court," and "it is difficult to articulate the criteria on *673which the finding of extraordinary circumstances is based." Id. at 552. In making a determination, "the court must consider a wide range of factors." Id. Because subsection (h) "invokes the pure equity power of the court," Schwochert v. Am. Fam. Mut. Ins. Co., 172 Wis. 2d 628, 633-34, 494 N.W.2d 201 (1993), the factors that a circuit court should consider will depend on the facts and equities of each individual case.
¶ 71. M.L.B. is clear. Extraordinary circumstances are not presented by the ordinary case.
¶ 72. However, the analysis set forth by the majority converts the holistic inquiry adopted by M.L.B. into a formulaic five-factor test: "We conclude that M.L.B. . . . unambiguously establishes] that a circuit court is to consider the five interest of justice factors in determining whether extraordinary circumstances are present under Wis. Stat. § 806.07(1)(h) such that relief from a judgment... is appropriate." Majority op., ¶ 41.
¶ 73. The five factors set forth by the majority are: (1) whether the judgment was the result of the conscientious, deliberate, and well-informed choice of the claimant; (2) whether the claimant received the effective assistance of counsel; (3) whether relief is sought from a judgment in which there has been no judicial consideration of the merits and the interests of deciding the particular case on the merits outweighs the finality of the judgment; (4) whether there is a meritorious defense to the claim; and (5) whether there are intervening circumstances making it inequitable to grant relief. Id., ¶ 36.
¶ 74. The majority acknowledges that most default judgments would satisfy the test it sets forth: "We agree with Miller's assessment that many of the factors will weigh in favor of a party seeking relief from a default judgment entered for failure to timely answer." Id., ¶ 46.
*674¶ 75. In most cases where there is a default, the majority's first factor will weigh in favor of relief because the judgment will not have been "the result of the conscientious, deliberate and well-informed choice of the claimant." Unlike in Brunswick Corporation, discussed by the majority,1 a defaulting party generally does not choose to concede anything — rather, it simply fails to answer.
¶ 76. Likewise, the second factor, "whether the claimant received the effective assistance of counsel," will usually weigh in favor of relief from a default judgment. An effective attorney would not likely default and give up a client's defenses to a claim.
¶ 77. The third factor, "whether relief is sought from a judgment in which there has been no judicial consideration of the merits," will often be present. By definition, there is no judicial consideration of the merits when there is default judgment. Under the majority's analysis, it seems that the "preference to afford litigants a day in court and a trial on the issues" will often outweigh finality. See majority op., ¶ 54.
¶ 78. The fourth factor, "whether there is a meritorious defense to the claim," will often be true. If there was no meritorious defense, what reason would the defaulting party have for seeking relief from the judgment?
¶ 79. It is unclear how the fifth factor, "whether there are intervening circumstances making it inequitable to grant relief," would be applied. If intervening circumstances refer to circumstances that occur after the entry of judgment, this factor does not take into consideration the reasons for default.
*675¶ 80. Missing from the majority's test is any consideration of the defaulting party's reasons for defaulting and whether those reasons should be excused. Thus, the majority's test would appear to be equally applicable to a party that intentionally failed to respond to a complaint or was inexcusably negligent.2
¶ 81. Contrary to the majority, I conclude that most default judgments are ordinary, rather than extraordinary, and will not warrant relief. By failing to actually require "extraordinary" circumstances, the majority ignores the M.L.B. court's caution that subsection (h) "should be used sparingly" and should not be interpreted "so broadly as to erode the concept of finality." 122 Wis. 2d at 550, 552.
¶ 82. The ultimate question for the circuit court should not be whether a party seeking to reopen a judgment meets a five-factor test. Rather, it should be a holistic inquiry into whether there are extraordinary circumstances "such that the sanctity of the final judgment is outweighed by the incessant command of the court's conscience that justice be done in light of all the facts." Id. at 550.
II
¶ 83. In addition to misconstruing the law, the majority misconstrues the facts. Its assertion that Ratzel *676was "Zurich's attorney of record" is much too simplistic. It overlooks the potential for conflict of interest inherent in the dual representation advocated by the majority and ignores the facts of record which suggest that Zurich had a different attorney who was actually representing its UIM defense.
¶ 84. At issue here are two different insurance claims: (1) the prosecution of a Wis. Stat. § 102.29 claim seeking reimbursement of benefits paid to Miller under a worker's compensation policy;3 and (2) the defense of a UIM claim made under an automobile liability policy.4 Even though both policies were issued by Zurich, they represent very different interests. The former's interest is aligned with the injured plaintiff,5 and the latter's interest is aligned with the tortfeasor. Let me explain.
*677¶ 85. The basis of the liability for both a Wis. Stat. § 102.29 claim and a UIM claim is the same — the tortfeasor's conduct. But the interests represented by those claims are opposite.
¶ 86. When prosecuting a § 102.29 claim, the attorney wants to maximize the negligence of the tortfeasor. The greater the negligence, the more money that will be available to reimburse the worker's compensation insurer under the § 102.29 formula.
¶ 87. The attorney representing the UIM carrier, however, has an interest in minimizing the liability of the tortfeasor. The exposure of the UIM carrier is minimized whenever the negligence of the tortfeasor is minimized.
¶ 88. Can an attorney in the same case both prosecute a § 102.29 claim and defend a UIM claim? The answer is probably not, because in the usual circumstance the attorney would be representing competing interests. Such dual representation poses the potential for a conflict of interest.
¶ 89. A central premise of the majority opinion is that relief is warranted because of "procedural irregularities" that occurred in the circuit court. The majority asserts that Attorney Ratzel was Zurich's "attorney of record." Majority op., ¶ 58. It considers two irregularities, "generated in part by plaintiffs counsel and [] circuit court personnel" in determining that extraordinary circumstances justify vacating the default judgment: (1) documents and notices that were not provided to Ratzel during the course of the litigation; and (2) the failure of circuit court personnel to list Ratzel "as Zurich's attorney of record" on CCAP Id., ¶¶ 58-59.
¶ 90. The irregularities identified by the majority relate to lack of notice to Ratzel. But Ratzel represented Zurich's worker's compensation interest. He informed Miller by letter that he did not represent Zurich on any *678UIM policy it issued. Id., ¶ 7. Not only that, but it is likely that Ratzel could not represent Zurich's UIM interest due to the potential conflict of interest discussed above.
¶ 91. In fact, it appears that Zurich had a different attorney who was actually representing its UIM interest. Attorney Lyons corresponded with Miller's counsel about potential UIM coverage over a period of months. See Id., ¶ 8.
¶ 92. In January of 2005 Lyons sent Miller's counsel a letter stating that his firm had been retained with regard to Miller's UIM claim, and he asked for Miller's medical reports.6 In February, he provided Miller's counsel with the relevant policy and asserted "[I]t would be our position that there is no [UIM] coverage." In March, Lyons sent a letter inquiring: "Now that you have had an opportunity to review the materials, I simply wanted to know your position on [UIM] coverage. ... If you agree with us that there is no coverage, I would ask that you please put that in writing; so that, we can document our file accordingly and conclude this matter."
¶ 93. None of the irregularities identified by the majority relate to Lyons, who appeared to be representing Zurich's UIM interest.7 Because of the different *679interests represented by the two policies and the potential conflict of interest, I conclude that the "irregularities" identified by the majority are a red herring.
¶ 94. I agree that, because Ratzel was representing Zurich's interest in the worker's compensation policy, he should have received the notices and letters, and his name should have been entered on CCAE However, I conclude that any failure to provide notice to Ratzel did not contribute to the default. Even if notice had been provided to Ratzel, it would have made no difference. Ratzel affirmatively stated that he was not representing Zurich's interest in any UIM policy. Due to the possible conflict of interest, Ratzel likely could not file an answer. The real reason that Zurich defaulted is simple — its claims adjuster made a mistake.
Ill
¶ 95. Absent an erroneous exercise of discretion, an appellate court should not substitute its own judgment for that of the circuit court — even if it would have decided the issue differently. See Kolupar v. Wilde Pontiac Cadillac, Inc., 2004 WI 112, ¶ 22, 275 Wis. 2d 1, 683 N.W.2d 58. A circuit court exercises its discretion when it examines the relevant facts, applies a proper standard of law, and using a demonstrated rational *680process, reaches a decision that a reasonable judge could reach. Loy v. Bunderson, 107 Wis. 2d 400, 414-15, 320 N.W.2d 175 (1982).
¶ 96. Here, Zurich filed a motion for relief under Wis. Stat. § 806.07(l)(h). When orally explaining its reasons for denying relief, the circuit court focused on its conclusion that service of the amended complaint was proper:
I believe Zurich was served. Unfortunately, there may have been some confusion when the amended summons and complaint were received by Zurich. There may have been some confusion as well when court notices were sent to the address that we had, but the main service I believe was the service of the amended summons and I believe that the amended complaint had to go along with the amended summons and I think with that step being taken that there was notice to Zurich and that Zurich then had a responsibility to act in some fashion.
[A] 1 though there is a claim that this is not something that is done in the interest of justice, I'm aware that there is at least one other case where the coverage issue, although there was some coverage, was not an issue that the Court then was able to deal with.
And I believe under the circumstances that the unfortunate failure to respond to the amended summons and complaint brings us to where we are today. I'm going to deny the motion for relief as has been requested by Zurich.
¶ 97. When denying the motion for relief, the circuit court appeared to consider only one factor — that service was proper. It is not surprising that the circuit court's analysis focused on this one factor, given that *681the bulk of Zurich's brief was devoted to allegations about the propriety of service.
¶ 98. Nevertheless, I now review the record to determine whether the circuit court examined the relevant facts and applied a proper standard of law when it denied the motion to vacate the default judgment under Wis. Stat. § 806.07(1) (h) in the interest of justice. The record makes clear that the circuit court failed to balance the competing interests of finality and fairness. I conclude that it erroneously exercised its discretion.
¶ 99. In independently evaluating the competing interests of finality and fairness, I determine that extraordinary circumstances are present here. Finality of judgment is an important consideration. This judgment, however, had not been final for long when Zurich moved for relief. In fact, Zurich rigorously contested coverage for months before the default judgment was entered.
¶ 100. Although Zurich did not timely answer the amended complaint, its failure to timely answer was due to an inadvertent mistake of a claims adjuster. The claims adjuster mistook Miller's amended complaint as a duplicate of a complaint that she had already processed. Although the mistake may not rise to the legal standard of "excusable neglect," it does appear to have been an honest mistake.
¶ 101. Once the mistake was discovered, Zurich's attorney moved quickly to remedy the default, filing an answer to the amended complaint only 17 days after the motion for default judgment was filed. This is not a case where the judgment was final long before the defaulting party sought to contest it.
¶ 102. Further, this is not a case where Miller has relied on the default judgment, and nothing in the record suggests that Miller was prejudiced by Zurich's *682delay in filing a response. For months, Miller had known that Zurich contested UIM coverage. I conclude that finality would not be significantly undermined by granting Zurich's motion.
¶ 103. The competing interest of finality is fairness. Here, there appear to be good reasons that this case should be tried on the merits. A default judgment was entered for a substantial sum of money — $2 million — on an underinsured motorists policy that may not even exist. Fairness weighs in favor of trying this case on the merits.
¶ 104. For the reasons set forth above, I conclude that extraordinary circumstances are present and that the interest in finality is overcome by the interest in fairness. Therefore, I determine that relief under Wis. Stat. § 806.07(l)(h) is warranted.
¶ 105. Ending the inquiry here leaves unanswered a procedural question that is bound to cause uncertainty on remand. The majority orders relief from judgment under subsection (h), and it remands to the circuit court to vacate the default judgment and decide this case on the merits. These instructions appear to leave the parties in procedural limbo.
¶ 106. In the circuit court, Zurich filed a motion to enlarge time to file an answer, which was denied. As the circuit court correctly explained, "[I]n order for me to grant a motion to extend the time for filing of an answer, I have to conclude that the failure to do so was as a result of excusable neglect[.]" The court could not determine "that the mistake that would have been made in the processing of the documents is such that it can constitute excusable neglect[.]" Although the court acknowledged that the facts of the case were "unfortunate," it denied the motion.
*683¶ 107. Because the motion to enlarge time was denied, Zurich's answer has never been accepted for filing by the court. Thus, the current status of the case is that no answer has been filed. On remand, the circuit court will be required to address this status, and therein lies a problem that has analytically been left unaddressed by both the majority opinion and this concurrence.
¶ 108. Wisconsin statutes provide that the circuit court may enlarge Zurich's time for filing an answer. However, it can do so only after it finds that the failure to answer was the result of excusable neglect and if the interests of justice would be served by the enlargement of time:
When an act is required to be done at or within a specified time, the court may order the period enlarged but only on motion for cause shown and upon just terms.... If the motion is made after the expiration of the specified time, it shall not be granted unless the court finds that the failure to act was the result of excusable neglect.
Wis. Stat. § 801.15(2)(a).
¶ 109. In Hedtcke v. Sentry Insurance Co., 109 Wis. 2d 461, 468, 326 N.W.2d 727 (1982), we explained that a circuit court may grant a motion to enlarge time if it "finds reasonable grounds for noncompliance 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[.]" Further, "when the circuit court determines that there is no excusable neglect, the motion [to enlarge time] must be denied." Id. We reiterated these conclusions recently in Estate of Otto v. Physicians Insurance Co. of Wisconsin, Inc., 2008 WI 78, ¶ 114, 311 Wis. 2d 84, 751 N.W.2d 805.
*684¶ 110. What, then, is the circuit court to do on remand? It has determined that there is no excusable neglect. Yet, under Wis. Stat. § 801.15(2)(a) and our case law, the court cannot enlarge the time for Zurich to file an answer unless it determines that the failure to act was due to excusable neglect. The circuit court will have to resolve this tension on remand.
¶ 111. For the reasons set forth above, I conclude that the circuit court failed to exercise its discretion when it denied Zurich's motion for relief under Wis. Stat. § 806.07(l)(h). I further conclude that extraordinary circumstances are present here. On remand, the circuit court will have to address the next question: whether, given its prior conclusion that there was no excusable neglect, it can grant Zurich's motion to enlarge time to file an answer. Accordingly, I respectfully concur.
¶ 112. I am authorized to state that Chief Justice SHIRLEY S. ABRAHAMSON joins this concurrence.Majority op., ¶ 50 (citing Allstate Ins. Co. v. Brunswick Corp., 2007 WI App 221, 305 Wis. 2d 400, 740 N.W.2d 888).
Although I agree with the majority that a defaulting party need not meet the legal standard for excusable neglect to be entitled to relief under subsection (h), I conclude that a defaulting party's reason for defaulting will likely weigh heavily in this inquiry. See Johns v. County of Oneida, 201 Wis. 2d 600, 609, 549 N.W.2d 269 (Ct. App. 1996) (noting that the defaulting party's nine-day delay in answering the complaint "appeared to be inadvertent rather than deliberate"). A party that sits back and knowingly defaults should not normally expect a court to conclude that the judgment is unfair.
Wisconsin's worker's compensation statutes provide that an "employer or compensation insurer who shall have paid or is obligated to pay a lawful claim under [worker's compensation] shall have the same right to make [a] claim or maintain an action in tort against any other party for such injury or death." Wis. Stat. § 102.29(1).
Under most circumstances, underinsured motorist coverage may come into play when there is a tortfeasor from whom the plaintiff is legally entitled to recover compensatory damages and that tortfeasor's insurance is insufficient to cover the liability incurred. If Zurich issued an underinsured motorists policy, it would not be obligated to compensate Miller for his injuries if Miller was not legally entitled to recover damages from Smith.
An insurer seeking subrogation is often named as an "involuntary plaintiff." "The statutory scheme under section 803.03(2) contemplates inclusion of a subrogated party claiming medical expenses as a plaintiff." 2 Arnold E Anderson, Wisconsin Insurance Law § 10.95 (5th ed. 2004). However, it matters not whether the worker's compensation carrier is named as a plaintiff or an involuntary defendant — the interest it represents is the same.
The letter stated in part: "With regards to [a] potential UIM claim, I am obtaining certified copies of the pertinent policy. I have reviewed an uncertified copy, but I want to obtain a certified copy before any decisions are made. Until I have that, I cannot tell you our position on whether there is any UIM coverage or not. It would appear that there may not be, in this case, but I cannot make that analysis until I have a certified copy of the policy."
Lyons received a copy of the amended complaint by letter. Majority op., ¶ 14. However, he informed Miller that he could *679not accept service on behalf of Zurich: "I have not made an official appearance in this action. I am not authorized to accept service on behalf of Zurich, and I cannot be served with all of the other discovery materials, since no official appearance has been made." Lyons insisted that Miller serve Zurich "through normal channels .... You will need to serve them directly and we'll have to go from there." Neither Lyons nor any other attorney answered the complaint on Zurich's behalf.