Bank of New York v. Shirley T. Carson

2015 WI 15
SUPREME COURT OF WISCONSIN
CASE NO.: 2013AP544
COMPLETE TITLE: The Bank of New York Mellon, fka The Bank of New
York, as
Trustee for CWABS, Inc. Asset-Backed
Certificates, Series
2007-13,
Plaintiff-Respondent-Petitioner,
v.
Shirley T. Carson,
Defendant-Appellant,
Bayfield Financial LLC and Collins Financial
Services,
Defendants.
REVIEW OF A DECISION OF THE COURT OF APPEALS
(Reported at 352 Wis. 2d 205, 841, N.W.2d 573)
(Ct. App. 2013 – Published)
PDC No.: 2013 WI App 153
OPINION FILED: February 17. 2015
SUBMITTED ON BRIEFS:
ORAL ARGUMENT: September 23, 2014
SOURCE OF APPEAL:
COURT: Circuit
COUNTY: Milwaukee
JUDGE: Jane V. Carroll
JUSTICES:
CONCURRED: PROSSER, ZIEGLER, GABLEMAN, JJJ., concur.
(Opinion filed.)
DISSENTED:
NOT PARTICIPATING:
ATTORNEYS:
For the plaintiff-respondent-petitioner, there were briefs
by Valerie L. Bailey-Rihn, Katherine Maloney Perhach, and
Quarles & Brady LLP, Madison and Milwaukee; and James W.
McGarry, Keith Levenberg, and Goodwin Procter LLP, Boston and
Washington. Oral argument by Valerie L. Bailey-Rihn.
For the defendant-appellant, there was a brief by April
A.G. Hartman, Jeffrey R. Myer, and Legal Action of Wisconsin,
Inc. Oral argument by April A.G. Hartman.
An amicus curiae brief by Grant F. Langley, city attorney;
Danielle M. Bergner, deputy city attorney; and Kail J. Decker,
assistant city attorney, on behalf of the City of Milwaukee.
An amicus curiae brief by Catherine M. Doyle, Amanda E.
Adrian, and Legal Aid Society of Milwaukee, Inc., on behalf of
the Legal Aid Society of Milwaukee.
2
2015 WI 15
NOTICE
This opinion is subject to further
editing and modification. The final
version will appear in the bound
volume of the official reports.
No. 2013AP544
(L.C. No. 2011CV1330)
STATE OF WISCONSIN : IN SUPREME COURT
The Bank of New York Mellon, fka The Bank of
New York, as Trustee for CWABS, Inc. Asset-
Backed Certificates, Series 2007-13,
Plaintiff-Respondent-Petitioner,
v. FILED
Shirley T. Carson,
FEB 17, 2015
Defendant-Appellant,
Diane M. Fremgen
Clerk of Supreme Court
Bayfield Financial LLC and Collins Financial
Services,
Defendants.
REVIEW of a decision of the Court of Appeals. Affirmed and
cause remanded.
¶1 ANN WALSH BRADLEY, J. Petitioner, Bank of New York
Mellon ("the Bank"), seeks review of a published decision of the
court of appeals that reversed the circuit court's denial of
Shirley Carson's motion to amend a judgment of foreclosure on
No. 2013AP544
her former home.1 She requested that the court find the property
to be abandoned and that it order a sale of the property upon
expiration of five weeks from the date of entry of the amended
judgment. The court of appeals concluded that the circuit court
erroneously determined that it was without authority to grant
the motion.
¶2 The Bank asserts that Wis. Stat. § 846.102 (2011-12)2,
the statute governing foreclosure of abandoned properties, does
not require it to sell a property after it obtains a judgment of
foreclosure and the redemption period has passed. It maintains
that the statute is permissive, not mandatory, and that it
cannot be required to sell a property. The Bank further
contends that even if the statute does mandate that the Bank
sell the abandoned property after the redemption period, it
provides no deadline for doing so. Thus, the Bank concludes
that it is free to execute on its judgment at any time within
five years after rendition of the judgment, and the circuit
court is without authority to order it to sell the property at a
specific time.
¶3 Based on the statute's plain language and context, we
conclude that when the court determines that a property is
abandoned, Wis. Stat. § 846.102 authorizes the circuit court to
1
Bank of New York v. Carson, 2013 WI App 153, 352 Wis. 2d
205, 841 N.W.2d 573 (reversing judgment of the circuit court for
Milwaukee County, Jane V. Carroll, judge).
2
All subsequent references to the Wisconsin Statutes are to
the 2011-12 version unless otherwise indicated.
2
No. 2013AP544
order a mortgagee to bring the property to sale after the
redemption period. We further conclude, consistent with the
purpose of the statute, that the circuit court shall order the
property to be brought to sale within a reasonable time after
the redemption period. The circuit court's determination of
what constitutes a reasonable time should be based on the
totality of the circumstances in each case.
¶4 In this case, the circuit court did not reach the
issue of whether the property had been abandoned. Accordingly,
we affirm the court of appeals and remand the cause to the
circuit court for such a determination and further proceedings.
I
¶5 In 2007, Countrywide Home Loans loaned $52,000 to
Carson. As security for the debt, Carson mortgaged her home on
Concordia Avenue in Milwaukee, Wisconsin. After Carson
defaulted on her payments, Countrywide and Carson entered an
agreement modifying the terms of the loan. Subsequently, Carson
again defaulted on the loan payments.
¶6 The Bank, as trustee for Countrywide, filed a
complaint against Carson, seeking a judgment of foreclosure and
sale of the mortgaged premises. Attempts to serve Carson at the
Concordia Avenue property were unsuccessful. In his affidavit,
the process server observed that the house appeared to be
vacant. On his first visit he reported that the garage had been
boarded, that the snow was not shoveled, there were no
footprints in it, and there was no furniture in the house.
Notes from his successive visits state that the snow was still
3
No. 2013AP544
not shoveled and there were still no footprints around the
house.
¶7 Thereafter, the Bank published notice of the
foreclosure action in a local newspaper. Carson, who was
physically and financially unable to care for the property, did
not file an answer or otherwise dispute the foreclosure. In
April 2011, BAC Home Loan Servicing, LP, apparently a loan
servicer for Countrywide, filed a City of Milwaukee Registration
of Abandoned Property in Foreclosure form for the property.3
¶8 The circuit court entered a judgment in favor of the
Bank. It determined that Carson owed the Bank $81,356.59.
After acknowledging that the property was not owner occupied,
the court directed that the property "shall be sold at public
auction under the direction of the sheriff, at any time after
three month(s) from the date of entry of judgment." The
judgment also enjoined both parties from committing waste on the
premises and specified that in the event the property is
abandoned by the defendants, the Bank "may take all necessary
steps to secure and winterize the subject property."
¶9 After the judgment was entered, the Bank did not take
steps to secure the property. It was repeatedly burglarized and
3
"Loan servicers are the entities that collect payments for
mortgages, provide billing and tax payments to the homeowners,
and have sole control over the modification of a loan." Andrew
Peace, Coming Up for Air: The Constitutionality of Using Eminent
Domain to Condemn Underwater Mortgages, 54 B.C. L. Rev. 2167,
2178 n.82 (2013).
4
No. 2013AP544
vandalized. At one point someone started a fire in the garage.
Despite an order from the City of Milwaukee Department of
Neighborhood Services to maintain the property, the Bank did not
do so. Carson received notices of accumulated trash and debris,
as well as notices of overgrown weeds, grass, and trees. The
City imposed approximately $1,800 in municipal fines on her and
she made payments of approximately $25 per month toward the
fines.
¶10 By November 2012, more than 16 months after the
judgment of foreclosure was entered, the Bank had not sold the
property and had no plans to sell it. Carson filed a motion to
amend the judgment to include a finding that the property was
abandoned and an order that the sale of the premises be made
upon expiration of five weeks from the date of entry of the
amended judgment, pursuant to Wis. Stat. § 846.102.4
¶11 In support of her motion, Carson referenced the
affidavit from the process server indicating that the house
appeared vacant. She produced her own affidavit stating that
she had terminated her utility accounts, that the property had
4
Wisconsin Stat. § 846.102(1) states:
In an action for enforcement of a mortgage lien if the
court makes an affirmative finding upon proper
evidence being submitted that the mortgaged premises
have been abandoned by the mortgagor and assigns,
judgment shall be entered as provided in s. 846.10
except that the sale of such mortgaged premises shall
be made upon the expiration of 5 weeks from the date
when such judgment is entered.
5
No. 2013AP544
been vandalized, that the doors and windows on the house had
been boarded, and that the garage had been damaged by fire. She
also produced the form the loan servicer filed with the City of
Milwaukee registering the premises as an abandoned property,
violation notices from the City indicating that there was trash
and debris on the property, a copy of the complaint record from
the City, and a re-inspection fee letter from the City.
¶12 The circuit court denied Carson's motion. It observed
that Wis. Stat. § 846.102 did not specifically grant it
authority to order the Bank to sell the property at a specific
time. It explained "I can't find anywhere in the statute [Wis.
Stat. § 846.102] that I have the authority to grant the relief
that [Carson is] requesting." The court further noted that the
statute contemplates that the redemption period be elected by
the mortgagee, not the borrower, and questioned whether a
mortgagee could be compelled to execute a judgment when someone
else is seeking the order. Accordingly, it stated, "I'm
specifically finding that I don't have the authority . . . so
the motion is denied on those grounds."
¶13 Carson appealed, arguing that under Wis. Stat.
§ 846.102 the circuit court did have the authority to order sale
of the property upon expiration of the redemption period. The
court of appeals agreed with Carson. Bank of New York v.
Carson, 2013 WI App 153, ¶9, 352 Wis. 2d 205, 841 N.W.2d 573.
It determined that "the plain language of the statute directs
the court to ensure that an abandoned property is sold without
delay, and it logically follows that if a party to a foreclosure
6
No. 2013AP544
moves the court to order a sale, the court may use its contempt
authority to do so." Id., ¶13. Accordingly, it reversed the
circuit court and remanded the case. Id., ¶16.
II
¶14 This case presents two issues. First, we are asked to
determine whether Wis. Stat. § 846.102 authorizes a circuit
court to order a mortgagee to bring a property to sale. Second,
we are asked whether a court can require a mortgagee to bring a
property to sale at a certain point in time. Both questions
require us to determine the scope of authority granted to the
circuit court by Wis. Stat. § 846.102. Statutory interpretation
is a question of law that we review independently of the
determinations rendered by the circuit court and the court of
appeals. Bank Mut. v. S.J. Boyer Constr., Inc., 2010 WI 74,
¶21, 326 Wis. 2d 521, 785 N.W.2d 462.
¶15 Our goal in statutory interpretation is to determine
what the statute means so that it may be given its full, proper,
and intended effect. State ex rel. Kalal v. Circuit Court for
Dane Cnty., 2004 WI 58, ¶44, 271 Wis. 2d 633, 681 N.W.2d 110.
Interpretation of a statute begins with an examination of the
statutory language. Id., ¶45. "Statutory language is given its
common, ordinary, and accepted meaning, except that technical or
specially-defined words or phrases are given their technical or
special definitional meaning." Id.
¶16 In seeking to give a statute its intended effect, we
are cognizant that "[a] statute's purpose or scope may be
readily apparent from its plain language or its relationship to
7
No. 2013AP544
surrounding or closely-related statutes——that is, from its
context or the structure of the statute as a coherent whole."
Id., ¶49. Thus, statutory language is interpreted "in the
context in which it is used; not in isolation but as part of a
whole; in relation to the language of surrounding or closely-
related statutes." Id., ¶46.
¶17 Where the statutory language is ambiguous we turn to
extrinsic sources, such as legislative history, to help us
discern the meaning of a statute. Id., ¶51. "[A] statute is
ambiguous if it is capable of being understood by reasonably
well-informed persons in two or more senses." Id., ¶47
(citations omitted).
III
¶18 We begin with the language of the statute at issue.
Wisconsin Stat. § 846.102 governs actions for enforcement of
mortgage liens on abandoned properties.5 Under the statute, if
the court makes an affirmative finding that a property has been
abandoned, it shall enter a judgment stating that "the sale of
such mortgaged premises shall be made upon the expiration of 5
weeks from the date when such judgment is entered." Wis. Stat.
§ 846.102(1). It states:
(1) In an action for enforcement of a mortgage lien if
the court makes an affirmative finding upon proper
evidence being submitted that the mortgaged premises
5
The language of the statute and its placement within
chapter 846 indicate that it governs only foreclosure actions
initiated by mortgagees.
8
No. 2013AP544
have been abandoned by the mortgagor and assigns,
judgment shall be entered as provided in s. 846.10
except that the sale of such mortgaged premises shall
be made upon the expiration of 5 weeks from the date
when such judgment is entered. Notice of the time and
place of sale shall be given under ss. 815.31 and
846.16 and placement of the notice may commence when
judgment is entered.
Wis. Stat. § 846.102(1) (emphasis added).
¶19 The statute further permits entities other than the
mortgagee to present evidence that a property had been abandoned
and describes what type of evidence should be considered:
(2) In addition to the parties to the action to enforce
a mortgage lien, a representative of the city, town,
village, or county where the mortgaged premises are
located may provide testimony or evidence to the court
under sub. (1) relating to whether the premises have
been abandoned by the mortgagor. In determining
whether the mortgaged premises have been abandoned,
the court shall consider the totality of the
circumstances, including the following:
(a) Boarded, closed, or damaged windows or doors to
the premises.
(b) Missing, unhinged, or continuously unlocked doors
to the premises.
(c) Terminated utility accounts for the premises.
(d) Accumulation of trash or debris on the premises.
(e) At least 2 reports to law enforcement officials of
trespassing, vandalism, or other illegal acts being
committed on the premises.
(f) Conditions that make the premises unsafe or
unsanitary or that make the premises in imminent
danger of becoming unsafe or unsanitary.
Wis. Stat. § 846.102(2).
¶20 The plain language of the statute grants the circuit
court the authority to order a bank to sell the property.
9
No. 2013AP544
Indeed, under the statute the court's judgment must include a
requirement that the property be sold. It provides that if the
court makes a finding of abandonment then "judgment shall be
entered as provided in s. 846.10 except that the sale of such
mortgaged premises shall be made upon the expiration of 5 weeks
from the date when such judgment is entered."6 Wis. Stat.
§ 846.102(1) (emphasis added).
¶21 Generally, "the word 'shall' is presumed mandatory
when it appears in a statute." Karow v. Milwaukee Cnty. Civil
Serv. Comm'n, 82 Wis. 2d 565, 570, 263 N.W.2d 214 (1978); see
also Norman J. Singer & J.D. Shambie Singer, 3 Sutherland
Statutory Construction § 57:2 (7th ed. 2008) ("'Shall' is
considered presumptively mandatory unless there is something in
the context or the character of the legislation which requires
it to be looked at differently."). We have previously
interpreted "shall" as mandatory when used in Wis. Stat. ch.
846. GMAC Mortgage Corp. v. Gisvold, 215 Wis. 2d 459, 478, 572
N.W.2d 466 (1998).
6
Wisconsin Stat. § 846.10 states, in relevant part:
(1) If the plaintiff recovers the judgment shall
describe the mortgaged premises and fix the amount of
the mortgage debt then due and also the amount of each
installment thereafter to become due, and the time
when it will become due, . . . and shall adjudge that
the mortgaged premises be sold for the payment of the
amount then due . . . and when demanded in the
complaint, direct that judgment shall be rendered for
any deficiency against the parties personally
liable . . . .
(2)
10
No. 2013AP544
¶22 We acknowledge, however, that although the word
"shall" suggests that a statutory provision is mandatory, the
legislature's use of the word "shall" is not governed by a per
se rule. See State v. R.R.E., 162 Wis. 2d 698, 707, 470 N.W.2d
283 (1991). This court has previously explained that "'[s]hall'
will be construed as directory if necessary to carry out the
intent of the legislature." Id.; see also State ex rel.
Marberry v. Macht, 2003 WI 79, ¶15, 262 Wis. 2d 720, 665 N.W.2d
155 (court considers legislative intent in determining whether a
statutory provision is mandatory or directory); State v. Thomas,
2000 WI App 162, ¶9, 238 Wis. 2d 216, 617 N.W.2d 230 (noting
that factors to consider in determining whether a statute is
mandatory include "the statute's nature, the legislative
objective for the statute, and the potential consequences to the
parties, such as injuries or wrongs.").
¶23 The context in which "shall" is used in Wis. Stat.
§ 846.102(1) indicates that the legislature intended it to be
mandatory. First, when the legislature uses the terms "shall"
and "may" in the same statutory section, it supports a mandatory
reading of the term "shall" as the legislature is presumed to be
aware of the distinct meanings of the words. GMAC Mortgage
Corp., 215 Wis. 2d at 478; Karow, 82 Wis. 2d at 571; Singer 7
Singer, Sutherland Statutory Construction § 57:3. In Wis. Stat.
§ 846.102(1) the legislature used both "shall" and "may"
indicating its intent that the words have different meanings.
¶24 Second, a comparison with the neighboring statutes
also suggests that the term "shall" in Wis. Stat. § 846.102 was
11
No. 2013AP544
intended to be mandatory. The statutes on both sides of Wis.
Stat. § 846.102 address mortgage foreclosures in other
circumstances. Wisconsin Stat. § 846.101 addresses foreclosures
on 20-acre properties.7 Wisconsin Stat. § 846.103 addresses
foreclosures on commercial properties and multifamily
residences.8 Under both statutes it is up to the mortgagee to
7
Wisconsin Stat. § 846.101 states:
(1) If the mortgagor has agreed . . . to the
provisions of this section, and the foreclosure action
involves a one- to 4-family residence that is owner-
occupied at the commencement of the action . . . the
plaintiff in a foreclosure action of a mortgage on
real estate of 20 acres or less . . . may elect
. . . to waive judgment for any deficiency which may
remain due to the plaintiff after sale of the
mortgaged premises . . . and to consent that the
mortgagor, unless he or she abandons the property, may
remain in possession of the mortgaged property and be
entitled to all rents, issues and profits therefrom to
the date of confirmation of the sale by the court.
(2) When plaintiff so elects, judgment shall be
entered as provided in this chapter, except that
. . . the sale of such mortgaged premises shall be
made upon the expiration of 6 months from the date
when such judgment is entered.
8
Wisconsin Stat. § 846.103 provides:
(1) No foreclosure sale involving real property
other than a one- to 4-family residence that is owner-
occupied at the commencement of the foreclosure action
. . . may be held until the expiration of 6 months
from the date when judgment is entered except a sale
under sub. (2). . . .
(continued)
12
No. 2013AP544
elect whether to seek a foreclosure judgment. See Wis. Stat.
§ 846.101 (court enters judgment if mortgagee waives judgment of
deficiency and permits the mortgagor to remain in possession of
the property until it is sold); Wis. Stat. § 846.103 (same).
In contrast to these neighboring statutes, Wis. Stat. § 846.102
does not require action by the mortgagee after it has initiated
a foreclosure proceeding. It specifically permits entities
other than the mortgagee to appear and submit evidence of
abandonment. Wis. Stat. § 846.102(2). As the court of appeals
stated, once a mortgagee has filed a foreclosure action, the
focus of the proceeding is on the condition of the property, not
the mortgagee's preference. Bank of New York, 352 Wis. 2d 205,
¶12.
¶25 The Bank contends that the court of appeals'
interpretation of Wis. Stat. § 846.103 in Arch Bay Holdings LLC-
(2) If the mortgagor of real property other than
a one- to 4-family residence that is owner-occupied at
the commencement of the foreclosure action . . . has
agreed . . . to the provisions of this section, the
plaintiff in a foreclosure action of a mortgage
. . . may elect by express allegation in the complaint
to waive judgment for any deficiency which may remain
due to the plaintiff after sale of the mortgaged
premises . . . and to consent that the mortgagor,
unless he or she abandons the property, may remain in
possession of the mortgaged property and be entitled
to all rents, issues and profits therefrom to the date
of confirmation of the sale by the court. When the
plaintiff so elects, judgment shall be entered as
provided in this chapter, except that . . . the sale
of the mortgaged premises shall be made upon the
expiration of 3 months from the date when such
judgment is entered.
13
No. 2013AP544
Series 2008B v. Matson, No. 2013AP744, unpublished slip op.
(Wis. Ct. App. Mar. 18, 2014), and Deutsche Bank Nat. Trust Co.
v. Matson, No. 2012AP1981, unpublished slip op. (Wis. Ct. App.
July 30, 2013), is dispositive on the issue of whether the court
can require a mortgagee to sell an abandoned property. In
Deutsche Bank, the court of appeals determined that the language
in Wis. Stat. § 846.103 permitted the mortgagee to sell the
property once the statutory prerequisites were met, but did not
require it. No. 2012AP1981, ¶20. In Arch Bay, the court
reached the same conclusion when interpreting a judgment
containing the same language as the statute. No. 2013AP744,
¶17.
¶26 The Bank maintains that because the court of appeals
determined that the language of Wis. Stat. § 846.103 was not
mandatory, the same construction should be applied to Wis. Stat.
§ 846.102. However, as discussed above, Wis. Stat. § 846.103
and Wis. Stat. § 846.102 are significantly different statutes.9
See supra ¶20. Further, Arch Bay and Deutsche Bank are
unpublished and have no precedential authority. Wis. Stat.
§ 809.23(3)(b). Although they may be cited as persuasive
authority, given the above discussion, they do not persuade us
that the language in Wis. Stat. § 846.102 is permissive.
¶27 Considering the statute's clear language and its
context, the Bank's argument that it cannot be required to sell
We decline to interpret the similar sale language in Wis.
9
Stat. §§ 846.101 and 846.103 as it is not at issue in this case.
14
No. 2013AP544
a property under Wis. Stat. § 846.102 is unpersuasive.
Wisconsin Stat. § 846.102 mandates that the court order a sale
of the mortgaged premises if certain conditions are met. Those
conditions do not depend on action by the mortgagee alone and
are not dependent on its acquiescence or consent.
IV
¶28 Having determined that Wis. Stat. § 846.102 authorizes
a court to order a mortgagee to bring a property to sale, we
turn to consider whether a court can also require a mortgagee to
bring a property to sale at a certain point in time.
¶29 Again, we begin with the words of the statute. It
provides that "the sale of such mortgaged premises shall be made
upon the expiration of 5 weeks from the date when such judgment
[of foreclosure] is entered." Wis. Stat. § 846.102(1). This
language is indicative of the time frame a court must impose for
the sale: "upon expiration of 5 weeks."
¶30 The Bank asserts that even if Wis. Stat. § 846.102
mandates that the circuit court order a sale of the property
after the redemption period, it provides no time limit for the
sale. Absent any specific timeline, the Bank contends that it
has five years to execute its judgment under Wis. Stat.
§ 815.04.10
10
Wisconsin Stat. § 815.04(1)(a) provides:
Upon any judgment of a court of record perfected
as specified in s. 806.06 or any judgment of any other
court entered in the judgment and lien docket of a
court of record, execution may issue at any time
(continued)
15
No. 2013AP544
¶31 We decline to adopt the Bank's argument. We
acknowledge that the word "upon" in Wis. Stat. § 846.102 is
ambiguous as "upon expiration of 5 weeks from the date when such
judgment is entered" could be read to mean any time after the
five weeks but before the five years. It could also be
interpreted to mean immediately upon expiration of five weeks or
something in between. In discerning the answer to our inquiry,
we examine here the context of the statute, its legislative
history, and the purpose of the statute.
¶32 When considered in light of its neighboring statutes,
the context of Wis. Stat. § 846.102 suggests that the
legislature intended a prompt sale. Wisconsin Stat. § 846.101,
addressing 20-acre properties, provides that if the mortgagee
waives judgment of deficiency and permits the mortgagor to
remain in the property until it is sold, the court shall enter a
judgment that the property be sold after the expiration of six
months from the date of the judgment. Wisconsin Stat.
§ 846.103, addressing foreclosures of commercial properties and
multifamily residences, provides that the mortgagee waives
judgment of deficiency and permits the mortgagor to remain in
the property until it is sold, the court shall enter a judgment
within 5 years after the rendition of the judgment.
When an execution has been issued and returned
unsatisfied in whole or in part other executions may
issue at any time upon application of the judgment
creditor.
16
No. 2013AP544
that the property be sold after the expiration of three months
from the date of the judgment. Wis. Stat. § 846.103(2).
¶33 The statute at issue in this case, Wis. Stat.
§ 846.102, prompts faster sales with fewer requirements for
abandoned premises than its neighboring statutes. It provides
that upon finding abandonment, the court shall enter a judgment
that the premises shall be sold after the expiration of five
weeks. Wis. Stat. § 846.102(1). Unlike its neighboring
statutes, Wis. Stat. § 846.102 does not contain the requirements
that the mortgagee waive deficiency judgment and permit the
mortgagor to remain on the premises in order for the court to
order a sale. When viewed in light of its neighboring statutes,
the loosened requirements in Wis. Stat. § 846.102 evince an
intent to ensure a prompt sale of the property.
¶34 The contrary statutory intent asserted by the Bank is
unconvincing. Referencing the redemption periods in Wis. Stat.
§§ 846.101, 846.102 and 846.103, the Bank contends that the
purpose behind the statute is to create delay so that defaulted
borrowers will have one last chance to retain their properties.
However, the Bank's assertion ignores the differences between
Wis. Stat. § 846.102 and those neighboring statutes. Wisconsin
Stat. § 846.102 addresses properties that have been abandoned,
properties which borrowers no longer have an interest in
retaining. Thus, the policy concern of creating a delay does
not appear to be implicated.
¶35 The legislative intent for a prompt sale is also
supported by the legislative history of Wis. Stat. § 846.102.
17
No. 2013AP544
In 2011, Wis. Stat. § 846.102 was amended to shorten the
redemption period for abandoned properties from two months to
five weeks, to add subsection (2) permitting the city, town,
village, or county to provide testimony or evidence of
abandonment, and to indicate what sort of evidence of
abandonment a court should consider. 2011 WI Act 136, §§ 1r, 2
(enacted Mar. 21, 2012). The Act was introduced as 2011 Senate
Bill 307 with bipartisan support. Four individuals spoke at the
public hearing on the bill: its sponsor, a representative of the
City of Milwaukee, a representative of Legal Action of
Wisconsin, and a representative of the Wisconsin Bankers
Association. 2011 Senate Bill 307, Hearing before the Senate
Committee on Financial Institutions and Rural Issues, 2011
Regular Session, Nov. 30, 2011. Each individual referenced that
the bill's intent was to help municipalities deal with abandoned
properties in a timely manner.11
¶36 Two of the speakers explained that abandoned
properties were a significant problem in Milwaukee. Such
properties increase the crime rate and have a destabilizing
impact on neighborhoods. This testimony echoes researchers'
findings that home abandonment leads to blight:
Abandoned homes substantially decrease the value of
neighboring properties, which in turn lowers the tax
revenue cities can collect to help alleviate the
11
The hearing can be viewed online at:
http://www.wiseye.org/Programming/VideoArchive/ArchiveList.aspx?
cm=152.
18
No. 2013AP544
blight caused by abandonment. Moreover, abandoned
homes become public nuisances, such as fire hazards,
that can endanger the community.
Creola Johnson, Fight Blight: Cities Sue to Hold Lenders
Responsible for the Rise in Foreclosures and Abandoned
Properties, 2008 Utah L. Rev. 1169, 1171.12
¶37 Interpreting Wis. Stat. § 846.102 as permitting sale
at any time within five years after judgment is entered would
exacerbate the problem that the statute was meant to ameliorate.
Such an interpretation would allow mortgagees to initiate
foreclosures, but fail to bring the properties to sale for an
extended period of time, leaving the properties in legal limbo.13
¶38 Multiple studies have remarked upon the negative
impact of such a scenario. For example, a study by the
12
The City of Milwaukee submitted an amicus brief detailing
the scope of the City's abandoned property problem. It noted
that there are currently 4,900 vacant buildings in the City.
According to the City's records, approximately 400 of those
4,900 properties are currently in some stage of mortgage
foreclosure.
Abandoned properties in Milwaukee are a magnet for crime
and create unsafe conditions. The City explained that since
2011, its police department has responded to at least 2,025
burglaries, 93 aggravated assaults, 84 robberies, 44 sexual
assaults, 36 sudden deaths, and 7 homicides at vacant buildings.
Further, the City's fire department reported a 163% increase in
the number of fires occurring in vacant residential buildings
between 2005 and 2012.
13
Various terms are used to describe this situation,
including: "abandoned foreclosure," "bank walkaway," "zombie
title/property," and "limbo loan." See Judith Fox, The
Foreclosure Echo: How Abandoned Foreclosures are Reentering the
Market Through Debt Buyers, 26 Loy. Consumer L. Rev. 25, 31
(2013).
19
No. 2013AP544
Government Accountability Office determined that abandoned
foreclosures create unsightly and dangerous properties that
contribute to neighborhood decline. GAO, Mortgage Foreclosures:
Additional Mortgage Servicer Actions Could Help Reduce the
Frequency and Impact of Abandoned Foreclosures, GAO-11-93 at 29
(Nov. 2010). "[A]s a result of vandalism, exposure, and
neglect, vacant properties can become worthless. . . . abandoned
foreclosures that remain vacant for extended periods pose
significant health, safety, and welfare issues at the local
level." Id. at 31.
¶39 Another study has observed that "[t]he result of these
abandoned foreclosures has been devastating to cities and
consumers throughout the country." Judith Fox, The Foreclosure
Echo: How Abandoned Foreclosures are Reentering the Market
through Debt Buyers, 26 Loy. Consumer L. Rev. 25, 29-30 (2013).
"With no threat of citation for nuisance violations, and thus
little incentive to maintain the premises, many lenders very
well may allow the properties they control to deteriorate."
Kristin M. Pinkston, In the Weeds: Homeowners Falling Behind on
their Mortgages, Lenders Playing the Foreclosure Game, and
Cities Left Paying the Price, 34 S. Ill. U.L.J. 621, 633 (2009).
Failing to interpret Wis. Stat. § 846.102 as enabling a court to
require a prompt sale would inhibit its use as a tool to address
abandoned properties.
¶40 Because its context and the legislative history of
Wis. Stat. § 846.102 clearly indicate that the statute was
intended to help municipalities deal with abandoned properties
20
No. 2013AP544
in a timely manner, we decline to interpret it so as to permit
properties to languish abandoned for five years. Cf. Waller v.
Am. Transmission Co., 2013 WI 77, ¶108, 350 Wis. 2d 242, 833
N.W.2d 764 (construing statute in a manner to further the
statutory purpose); Bank Mut., 326 Wis. 2d 521, ¶¶71-76
(interpreting Wis. Stat. § 846.103 in a manner consistent with
the statute's goals).
¶41 In order to give effect to the statute's purpose, we
interpret the requirement in Wis. Stat. § 846.102 that a court
order an abandoned property to be brought to sale after the five
week redemption period as a requirement that the court order the
property to be brought to sale within a reasonable time after
the redemption period. Admittedly, what is considered a
reasonable time will vary with the circumstances of each case.
The circuit court is in the best position to consider arguments
and evidence on this issue. Thus, we leave it to the circuit
court's discretion to determine, after considering the totality
of the circumstances, what a reasonable period of time may be
for each case, in light of the statute's purpose.
V
¶42 In this case, the circuit court did not determine
whether the property on Concordia Avenue was abandoned. Rather,
it denied Carson's motion after concluding that it did not have
the authority to order the mortgagee to bring the property to
sale as requested by Carson. Given that we have concluded that
the circuit court does have such authority, a finding as to
whether the property has been abandoned is needed here. Absent
21
No. 2013AP544
a finding of abandonment, sale of the property cannot be ordered
under Wis. Stat. § 846.102.
¶43 Accordingly, we remand the case to the circuit court
to determine whether the Concordia property has been abandoned.
If the court finds that the property has been abandoned, it
shall consider the totality of the circumstances and, consistent
with the statutory purpose, enter an order stating the
reasonable time after the redemption period in which the
mortgagee must bring the property to sale.
VI
¶44 In sum, based on the statute's plain language and
context we conclude that when the court determines that the
property is abandoned, Wis. Stat. § 846.102 authorizes the
circuit court to order a mortgagee to bring a mortgaged property
to sale after the redemption period.
¶45 We further conclude, consistent with the purpose of
the statute, that the circuit court shall order the property to
be brought to sale within a reasonable time after the redemption
period. The circuit court's determination of what constitutes a
reasonable time should be based on the totality of the
circumstances in each case.
¶46 In this case, the circuit court did not reach the
issue of whether the property had been abandoned. Accordingly,
we affirm the court of appeals and remand the case to the
circuit court for such a determination and further proceedings.
By the Court.—The decision of the court of appeals is
affirmed and the cause is remanded to the circuit court.
22
No. 2013AP544
23
No. 2013AP544.dtp
¶47 DAVID T. PROSSER, J. (concurring). I agree with the
majority's decision to affirm the court of appeals. I do not
agree with the majority's reasoning in support of this decision.
In my view, the owner of real property may seek a judicial sale
of the property when the owner's authority to sell is impeded or
otherwise in doubt. Wis. Stat. § 840.03(1)(g). However, the
ultimate availability of this judicial "remedy" is dependent
upon the equities involved, including recognition of the
"interests in real property" of others. Wis. Stat. § 840.01.
For the reasons stated below, I respectfully concur.
I
¶48 The majority opinion is preoccupied with an
interpretation of Wis. Stat. § 846.102, which is part of the
chapter on Real Estate Foreclosure. Chapter 846 is a detailed
and vitally important chapter of the Wisconsin Statutes.
Section 846.102, entitled "Abandoned premises," is a significant
provision within the chapter. A mistaken interpretation of this
section is likely to have profound ramifications on real estate
financing in Wisconsin.
¶49 The early sections of Chapter 846 set out foreclosure
procedure in a variety of situations. Before examining these
sections, I believe it is useful to reiterate several
fundamental principles.
¶50 A mortgage has been defined as "any agreement or
arrangement in which property is used as security." Wis. Stat.
§ 851.15. "Wisconsin is a lien-theory state with regard to
1
No. 2013AP544.dtp
mortgages. A mortgage creates a lien on real property but does
not convey title to the property to the mortgagee (lender)."
Lawrence Sager, Wisconsin Real Estate Practice & Law 137 (11th
ed. 2004).
¶51 In simple terms, a "mortgage conveys an interest in
the real estate to the lender as security for the debt, while
the mortgage note is a promise to repay the debt. Mortgages are
the most common form of loan instruments in Wisconsin." Id.
¶52 The foreclosure provisions of Chapter 846 are invoked
by mortgagees (lenders) when a mortgagor (borrower) fails to
repay a debt. The law provides protections for the mortgagor,
so that a mortgagee cannot move too quickly against the
mortgagor, and the mortgagor has a period to redeem the property
after foreclosure.
¶53 As a practical matter, a mortgagee invokes the
foreclosure provisions of Chapter 846 when its loan is not being
repaid. However, foreclosure does not transfer ownership of the
property to the mortgagee. Thus, the mortgagee does not control
the mortgaged property after foreclosure, and it may end up
receiving no payment on its loan until the property is sold and
the sale is confirmed. As a result, the mortgagee normally has
a strong incentive for a prompt sale after foreclosure.
¶54 The mortgagee is usually entitled to a deficiency
judgment against the mortgagor in the event that sale of the
property does not satisfy the debt. In truth, however, many
mortgagors do not have the wherewithal to satisfy a deficiency
judgment. This is one reason why the mortgagee may waive its
2
No. 2013AP544.dtp
right to a deficiency judgment in order to speed up sale of the
property. There is no reason for the mortgagee to delay sale of
the property unless there is a rational economic reason to do
so.
¶55 Wisconsin Stat. § 846.10 is the basic foreclosure
statute. It reads in part:
(1) If the plaintiff recovers the judgment shall
describe the mortgaged premises and fix the amount of
the mortgage debt then due and also the amount of each
installment thereafter to become due, and the time
when it will become due, and whether the mortgaged
premises can be sold in parcels and whether any part
thereof is a homestead, and shall adjudge that the
mortgaged premises be sold for the payment of the
amount then due and of all installments which shall
become due before the sale, or so much thereof as may
be sold separately without material injury to the
parties interested, and be sufficient to pay such
principal, interest and costs; and when demanded in
the complaint, direct that judgment shall be rendered
for any deficiency against the parties personally
liable and, if the sale is to be by referee, the
referee must be named therein.
Wis. Stat. § 846.10(1).
¶56 Subsection (2) then reads:
(2) . . . No sale involving a one- to 4-family
residence that is owner-occupied at the commencement
of the foreclosure action . . . may be held until the
expiration of 12 months from the date when judgment is
entered, except a sale under s. 846.101 or
846.102. . . . In all cases the parties may, by
stipulation, filed with the clerk, consent to an
earlier sale.
Wis. Stat. § 846.10(2).
¶57 Section 846.101 deals with foreclosure sales
(primarily of residential property under 20 acres) in which the
mortgagor has agreed to a shorter period of time for sale and
3
No. 2013AP544.dtp
redemption (six months) and the "plaintiff" (mortgagee) has
elected in its complaint to waive its right to a deficiency
judgment against the mortgagor.
¶58 Section 846.102 permits an even shorter period between
foreclosure and sale (five weeks) when the court finds that the
mortgagor has abandoned the property——that is, "relinquishment
of possession or control of the premises whether or not the
mortgagor or the mortgagor's assigns have relinquished equity
and title." Wis. Stat. § 846.102(1).
¶59 Section 846.103 relates to "Foreclosures of commercial
properties and multifamily residences."
¶60 The mortgagee is the "plaintiff" under these four
sections. The mortgagor does not need to sue the mortgagee
because the mortgagor may stipulate to a sale without initiating
litigation. Wis. Stat. § 846.10(2).
¶61 That the mortgagee is the "plaintiff" under Wis. Stat.
§ 846.102 is clear from the opening phrase of the section: "In
an action for enforcement of a mortgage lien . . . ." The
mortgagee has the "mortgage lien" on mortgaged property as well
as standing to enforce the lien; the mortgagor does not have
either. Moreover, although § 846.102 does not use the word
"plaintiff," as surrounding §§ 846.10, 846.101, and 846.103 do,
§ 846.102 refers back to § 846.10: "judgment shall be entered as
provided in s. 846.10 . . . ."
¶62 Any notion that a municipality could bring an action
under § 846.102 is belied by the language in subsection (2),
4
No. 2013AP544.dtp
which limits the role of "a representative" of a municipality to
providing testimony or evidence of abandonment.1
II
¶63 In this case, the Bank of New York brought suit
against Shirley Carson under Wis. Stat. § 846.101. The Bank
waived its right to a deficiency judgment. The complaint, filed
January 25, 2011, reads in part:
6. The mortgagors expressly agreed to the
reduced redemption period provisions contained in
Chapter 846 of the Wisconsin Statutes; the plaintiff
hereby elects to proceed under section 846.101 with a
six month period of redemption, thereby waiving
judgment for any deficiency against every party who is
personally liable for the debt, and to consent that
the owner, unless he or she abandons the property, may
remain in possession and be entitled to all rents and
profits therefrom to the date of confirmation of the
sale by the court.
¶64 The Milwaukee County Circuit Court, Mel Flanagan,
Judge, entered a default judgment (Findings of Fact, Conclusions
of Law and Judgment) on June 13, 2011. The court found that
"the mortgaged premises . . . shall be sold at public auction
1
The principal author of the bill creating subsection (2)
of Wis. Stat. § 846.102, Senator Glenn Grothman, explained that
the purpose of the legislation was to shorten the redemption
period in abandonment cases from two months to five weeks and to
permit municipalities to present evidence of abandonment. He
testified: "The effects of this bipartisan bill will be modest,
but they are an attempt to better balance the needs of
municipalities and responsible homeowners while still protecting
the rights of property owners who may have fallen on hard
times." Legislative Council File for 2011 S.B. 307, Letter from
Sen. Glenn Grothman to Members of the Assembly Committee on
Financial Institutions (Feb. 1, 2012), available at
http://legis.wisconsin.gov/lc/comtmats/old/11files/sb0307_201112
01084222.pdf.
5
No. 2013AP544.dtp
under the direction of the sheriff, at any time after three
month(s) from the date of entry of judgment." (Emphasis added.)
The court also found "THAT NO DEFICIENCY JUDGMENT MAY BE
OBTAINED AGAINST ANY DEFENDANT." The court determined that the
mortgagor's indebtedness totaled $81,356.59.
¶65 The mortgagor made no effort to redeem the property.
In fact, she abandoned the property, according to an affidavit
she filed with the court on November 6, 2012.
¶66 On the same date, the mortgagor filed a motion in the
original foreclosure case. The mortgagor brought the motion
under Wis. Stat. §§ 806.07(g) & (h) and 846.102. The motion
sought to reopen the foreclosure judgment pursuant to Wis. Stat.
§ 806.07 and to compel the Bank to sell the mortgaged property
"upon the expiration of 5 weeks from the date of entry of the
amended judgment" under Wis. Stat. § 846.102.
¶67 As the majority opinion notes, the Milwaukee County
Circuit Court, Jane Carroll, Judge, denied the motion. The
court "observed that Wis. Stat. § 846.102 did not specifically
grant it authority to order the Bank to sell the property at a
specific time." Majority op., ¶12.
It explained "I can't find anywhere in the statute
[Wis. Stat. § 846.102] that I have the authority to
grant the relief that [Carson is] requesting." The
court further noted that the statute contemplates that
the redemption period be elected by the mortgagee, not
the borrower, and questioned whether a mortgagee could
be compelled to execute a judgment when someone else
is seeking the order. Accordingly, it stated, "I'm
specifically finding that I don't have the
authority . . . so the motion is denied on those
grounds."
Id.
6
No. 2013AP544.dtp
¶68 The court of appeals reversed. Bank of New York v.
Carson, 2013 WI App 153, 352 Wis. 2d 205, 841 N.W.2d 573. The
court of appeals criticized the Bank (mortgagee) for not
maintaining the property. Id., ¶5. More important, the court
of appeals concluded that a mortgagor could rely on Wis. Stat.
§ 846.102 to compel a sale of the mortgagor's property:
We . . . conclude that the trial court erred as a
matter of law when it concluded that only the Bank
could elect the five-week abandonment period provided
in the statute. The trial court could
have . . . decided to amend the judgment to a
foreclosure of an abandoned property as described by
§ 846.102.
Id., ¶12. The court of appeals added:
The statutory language also makes clear that the
trial court did have the power to order the Bank to
sell the property upon the expiration of the
redemption period. . . . We conclude that the plain
language of the statute directs the court to ensure
that an abandoned property is sold without delay, and
it logically follows that if a party to a foreclosure
moves the court to order a sale, the court may use its
contempt authority to do so.
Id., ¶13.
¶69 The majority affirms the court of appeals without
disavowing these pronouncements. On the contrary, the majority
adopts the method of statutory interpretation used by the court
of appeals, see majority op., ¶¶18, 20, 21, 23, 24, to reach the
following conclusions:
(1) "The plain language of [Wis. Stat. § 846.102]
grants the circuit court the authority to order a bank to sell
the property." Id., ¶20. "[I]f the court makes a finding of
abandonment then 'judgment shall be entered as provided in s.
7
No. 2013AP544.dtp
846.10 except that the sale of such mortgaged premises shall be
made upon the expiration of 5 weeks from the date when such
judgment is entered.' Wis. Stat. § 846.102(1) (emphasis
added)." Id. (footnote omitted).
(2) "The context in which 'shall' is used in Wis.
Stat. § 846.102(1) indicates that the legislature intended it to
be mandatory." Id., ¶23.
(3) "Wis. Stat. § 846.102 does not require action by
the mortgagee after it has initiated a foreclosure
proceeding. . . . As the court of appeals stated, . . . the
focus of the proceeding is on the condition of the property, not
the mortgagee's preference." Id., ¶24.
(4) "Considering the statute's clear language and its
context, the Bank's argument that it cannot be required to sell
a property under Wis. Stat. § 846.102 is unpersuasive.
Wisconsin Stat. § 846.102 mandates that the court order a sale
of the mortgaged premises if certain conditions are met. Those
conditions do not depend on action by the mortgagee alone and
are not dependent on its acquiescence or consent." Id., ¶27.
(5) "[W]e turn to consider whether a court can also
require a mortgagee to bring a property to sale at a certain
point in time." Id., ¶28. "[W]e begin with the words of the
statute. . . . This language is indicative of the time frame a
court must impose for the sale: 'upon expiration of 5 weeks.'"
Id., ¶29.
(6) "[T]he context of Wis. Stat. § 846.102 suggests
that the legislature intended a prompt sale." Id., ¶32. "The
8
No. 2013AP544.dtp
legislative intent for a prompt sale is . . . supported by the
legislative history . . . ." Id., ¶35.
¶70 I acknowledge that the majority opinion softens its
holdings by requiring a court acting under Wis. Stat. § 846.102
to order mortgaged property to be "brought to sale within a
reasonable time after the redemption period." Id., ¶41. But
this statement is inconsistent with the majority's overall
interpretation of the statute.
III
¶71 The majority opinion radically revises the law on
mortgage foreclosure. Under Wisconsin law, a lending
institution like the Bank of New York does not own the property
upon which it holds a mortgage as security for a debt. The
mortgagee's obvious goal is to be repaid on its loan, with
interest for the use of its money. When this goal becomes
infeasible, the mortgagee prudently seeks to minimize its loss.
Sometimes the mortgagee delays the sale of foreclosed property
in the expectation that the circumstances for sale will improve.
The majority opinion substantially impairs the mortgagee's
ability to minimize or mitigate a loss.
¶72 The opinion shifts to the circuit court the authority
to set the date for sale of abandoned property. It gives the
court authority to disregard the preferences of the mortgagee as
to the timing of the sale when the mortgagee files for
foreclosure under Wis. Stat. §§ 846.10, 846.101, or 846.102.
¶73 Because of this loss in flexibility, mortgagees are
likely to act to protect their interests. For instance, the
9
No. 2013AP544.dtp
costs of borrowing money to finance residential real estate
transactions are likely to go up, and some potential borrowers
will be denied loans altogether.
¶74 Under the new regime, thousands of foreclosed
properties statewide may have to be scheduled for sale within a
few months of this decision because they have already been held
by mortgagees without sale for an "unreasonable" period after
foreclosure.
¶75 These consequences are not discussed by a majority
that is a bit too eager to depict mortgage lenders as the source
of the problem.
¶76 Knowing what they face if they file for foreclosure
when the timing is not propitious, many mortgagees may choose
not to file foreclosure actions. If mortgagees forego filing,
leverage will transfer from mortgagees to non-paying mortgagors.
¶77 Still, some mortgagors may wish to extricate
themselves from their continuing ownership responsibilities.
¶78 The majority attempts to preclude a mortgagor from
becoming a plaintiff under Wis. Stat. § 846.102, majority op.,
¶18 n.5, by suggesting that only a mortgagee may initiate an
action under Chapter 846. This is a correct interpretation of
the chapter. However, it does not account for Wis. Stat.
§ 840.03.
¶79 Wisconsin Stat. § 840.01(1) defines the term "interest
in real property."2 The definition implicates those who own or
2
Wisconsin Stat. § 840.01(1) reads:
(continued)
10
No. 2013AP544.dtp
hold title to land (like Shirley Carson) and those with
"security interests and liens on land" (like the Bank of New
York).
¶80 Wisconsin Stat. § 840.03 then provides:
Real property remedies. (1) Any person having
an interest in real property may bring an action
relating to that interest, in which the person may
demand the following remedies singly, or in any
combination, or in combination with other remedies not
listed, unless the use of a remedy is denied in a
specified situation:
(a) Declaration of interest.
(b) Extinguishment or foreclosure of
interest of another.
(c) Partition of interest.
(d) Enforcement of interest.
(e) Judicial rescission of contract.
(f) Specific performance of contract or
covenant.
(g) Judicial sale of property and
allocation of proceeds.
(h) Restitution.
(1) Except as provided in sub. (2), "interest in
real property" includes estates in, powers under ch.
702 over, present and future rights to, title to, and
interests in real property, including, without
limitation by enumeration, security interests and
liens on land, easements, profits, rights of
appointees under powers, rights under covenants
running with the land, powers of termination and
homestead rights. The interest may be an interest
that was formerly designated legal or equitable. The
interest may be surface, subsurface, suprasurface,
riparian or littoral.
11
No. 2013AP544.dtp
(i) Judicial conveyance of interest.
(j) Possession.
(k) Immediate physical possession.
(l) Restraint of another's use of, or
activities on, or encroachment upon
land in which plaintiff has an
interest.
(m) Restraint of another's use of,
activities on, or disposition of land
in which plaintiff has no interest; but
the use, activity or disposition affect
plaintiff's interest.
(n) Restraint of interference with rights
in, on or to land.
(o) Damages.
(2) The indication of the form and kind of
judgment in a chapter dealing with a particular remedy
shall not limit the availability of any other remedies
appropriate to a particular situation.
(Emphasis added.)
¶81 Section 840.03 includes in its listed remedies
"Judicial sale of property" and "Judicial conveyance of
interest." Mortgagors may seek to secure one of these remedies
to escape the responsibilities of ownership.
¶82 As I read the statute, the owner of property may
"bring an action" for a judicial sale or a judicial conveyance
of interest. Although a mortgagor may not be able to serve as
plaintiff in a foreclosure action under any of the foreclosure
statutes, e.g., Wis. Stat. §§ 846.10, 846.101, 846.102, and
846.103, the mortgagor may be able to invoke the new principles
this court has discovered in Wis. Stat. § 846.102 when it
12
No. 2013AP544.dtp
"brings an action" for judicial sale or conveyance of interest
under Wis. Stat. § 840.03(1).
¶83 Wisconsin Stat. § 840.03(1) has been part of Wisconsin
law for 40 years. See § 16, Chapter 189, Laws of 1973 (creating
Wis. Stat. § 840.03(1) (1974)). It has been interpreted as
creating substantive rights. SJ Props. Suites v. Specialty Fin.
Grp., LLC, 864 F. Supp. 2d 776 (E.D. Wis. 2012). Nonetheless, a
mortgagor seeking the sale of his or her property or the
conveyance of his or her property under Wis. Stat. § 840.03(1)
would heretofore have been required to show that the mortgagor
was entitled equitably to this remedy, inasmuch as it is clear
that a defaulting mortgagor does not have the same powers and
prerogatives as a mortgagee under Wis. Stat. § 846.102.
¶84 "An action to foreclose a mortgage is equitable in
nature." Wis. Brick & Block Corp. v. Vogel, 54 Wis. 2d 321,
327, 195 N.W.2d 664 (1972) (citing Frick v. Howard, 23
Wis. 2d 86, 96, 126 N.W.2d 619 (1964)); see also Harbor Credit
Union v. Samp, 2011 WI App 40, ¶19, 332 Wis. 2d 214, 796
N.W.2d 813; JP Morgan Chase Bank, NA v. Green, 2008 WI App 78,
¶11, 311 Wis. 2d 715, 753 N.W.2d 536; First Fin. Sav. Ass'n v.
Spranger, 156 Wis. 2d 440, 444, 456 N.W.2d 897 (Ct. App. 1990).
This equity prevails throughout the proceedings. GMAC Mortg.
Corp. v. Gisvold, 215 Wis. 2d 459, 480, 572 N.W.2d 466 (1998).
The court's discretion should be exercised so that "no injustice
shall be done to any of the parties." Strong v. Catton, 1 Wis.
408, 424 (1853).
13
No. 2013AP544.dtp
¶85 Considering equity, a mortgagee may want to delay the
sale of mortgaged property that has been abandoned for
legitimate economic reasons. Admittedly, the mortgagee might be
forced to recognize that such a delay will constitute a burden
on the mortgagor in terms of maintenance and taxes.
Consequently, it is not inherently unreasonable for a mortgagor
to seek relief from such a burden, inasmuch as it is unrealistic
to expect that a mortgagor will properly maintain and pay the
taxes on property it has abandoned. At the same time, however,
if the mortgagee is expected to assume responsibility for
abandoned property, the mortgagee must be given reasonable
options, even if unpalatable, rather than be forced into an
unwanted sale without the protection of the equitable principles
upon which mortgage foreclosures rest.
¶86 The majority opinion alters these principles by its
interpretation of Wis. Stat. § 846.102. It forces prompt public
sales despite the objection of the mortgagee. This
interpretation of Wis. Stat. § 846.102 does not comport with the
statute's language or its legislative history and will often be
inequitable to the mortgagee. Even a mortgagee that
conscientiously maintains abandoned property may be forced to
sell it quickly at the direction of the court.
¶87 I agree that the mortgagor here is entitled to seek
the statutorily recognized remedy of "sale," but only as
provided under Wis. Stat. § 840.03(1)(g), prior to the court's
mistaken interpretation of Wis. Stat. § 846.102. For the
reasons set forth, I respectfully concur.
14
No. 2013AP544.dtp
¶88 I am authorized to state that Justice ANNETTE
KINGSLAND ZIEGLER and Justice MICHAEL J. GABLEMAN join this
concurrence.
15