Pelfresne v. Village of Williams Bay

• Decision Date: 17 January 1991
• Docket Number: No. 89-3060,89-3060
• Citation: 917 F.2d 1017
• Parties: Donald W. PELFRESNE, Plaintiff-Appellant, v. VILLAGE OF WILLIAMS BAY, et al., Defendants-Appellees.
• Court: U.S. Court of Appeals — Seventh Circuit

Page 1017

917 F.2d 1017

Donald W. PELFRESNE, Plaintiff-Appellant, v. VILLAGE OF WILLIAMS BAY, et al., Defendants-Appellees.

No. 89-3060.

United States Court of Appeals, Seventh Circuit.

Argued Sept. 12, 1990.

Decided Nov. 8, 1990.

Rehearing Denied Jan. 17, 1991.

Leonard S. Shifflett, Michael F. Csar, Burke, Wilson & McIlvaine, Celeste Cinquino, Righeimer, Martin & Cinquino, Chicago, Ill., for plaintiff-appellant.

Richard R. Grant, Louis Gage, Consigny, Andrews, Hemming & Grant, Janesville, Wis., for defendants-appellees.

Before WOOD, Jr., POSNER, and FLAUM, Circuit Judges.

POSNER, Circuit Judge.

The district court dismissed Donald Pelfresne's suit against a municipality and a number of its officials and employees as barred by the Anti-Injunction Act, 28 U.S.C. Sec. 2283, and then refused to allow him to amend his complaint. The appeal presents interesting questions, rarely encountered in a federal court, of property law.

In November 1984 the Village of Williams Bay in Walworth County, Wisconsin brought suit in the Circuit Court of Walworth County against Michael Schiessle. The suit sought a court order to raze four single-family houses located on property owned by Schiessle in Williams Bay that were in disrepair and believed to be unsafe. The Village filed a notice of lis pendens (pending litigation) in the Walworth County registry of deeds.

The next month, December 1984, Schiessle conveyed the property to Lommen Eley and John Koch to hold in trust for him, whereupon the Village named Eley and Koch as additional defendants in its suit. The suit was dismissed in July of the following year (1985) on technical grounds and promptly refiled, but no new notice of lis pendens was filed. In February 1986 Eley and Koch conveyed the property to Anita Catania, but the conveyance was not recorded.

On June 25, 1986, judgment was entered for the Village in the refiled suit. The judgment ordered the buildings razed and also awarded the Village damages and costs totaling $629.42. The clerk of the circuit court, pursuant to statute, prepared the judgment docket card that appears at the end of this opinion. Wis.Stat. Sec. 806.10(1). The card notes the damages and costs but not the raze order.

In September 1987, months after the judgment in the circuit court action had become final upon the exhaustion of the defendants' appellate remedies, both the release of the notice of lis pendens in the first suit (the one that had been dismissed) and the deed to Catania were recorded in the Walworth County registry of deeds, along with another deed from Catania, this one made in either 1986 or 1987 (the record is unclear which) to Allen Veren. Schiessle continued as the beneficial owner.

The day after these instruments were recorded, Pelfresne bought the property for $60,000 and ten days later he brought this suit, basing federal jurisdiction on diversity of citizenship. (He is a citizen of Michigan, while all the defendants are citizens of Wisconsin.) The suit depicts him as a bona fide purchaser for value who under Wisconsin law was not bound by the raze order contained in the judgment that had been entered against Schiessle, Eley, and Koch in June 1986. He sought a preliminary injunction against the Village's carrying out the raze order. This was denied on a variety of grounds, including the unlikelihood that Pelfresne could establish that the enforcement of the order would violate his rights under Wisconsin law.

We affirmed the denial of the preliminary injunction, 865 F.2d 877 (7th Cir.1989), but remarked that regardless of the merits of Pelfresne's claim as they might ultimately be determined at trial, the district court might lack jurisdiction to enjoin the raze order, whether preliminarily or permanently. The Anti-Injunction Act forbids a federal court to enjoin state court proceedings and the prohibition has been interpreted to bar an injunction against the enforcement of a judgment obtained in such proceedings, even though such an injunction is directed not against the state court itself but against the victorious party in state court proceedings, who is trying to enforce the judgment he obtained. Id. at 880 n. 1. We therefore instructed the district judge to determine the applicability of the Act before he considered the merits of Pelfresne's claim.

He did so, held that the Act indeed barred an injunction, and therefore dismissed the complaint, because the only relief Pelfresne had sought was an injunction against the raze order. The judge refused to let Pelfresne amend his complaint to charge that the raze order was unconstitutional and to seek damages, as well as an injunction, in order to remedy the constitutional violation. Having thus shut the last door on Pelfresne's hopes, the judge dismissed the entire suit.

The main purpose of the Anti-Injunction Act is to avoid the affront to comity (the mutual respect of sovereigns) that would be entailed if a court of one sovereign, namely a federal court, attempted to enjoin proceedings in the court of another sovereign, namely a state court. The affront would be greatest if the injunction was addressed to the court itself, commanding it to stay its hand, rather than to the parties, commanding them to stay their hands. Yet even in 1793, when the Anti-Injunction Act was first passed, injunctions of the former type were rare. Comment, Federal Court Stays of State Court Proceedings: A Re-examination of Original Congressional Intent, 38 U.Chi.L.Rev. 612, 615 n. 24 (1971). And as their objective could and was obtained simply by enjoining the parties to the litigation from proceeding with their case, had the Act been confined to injunctions addressed to courts or judges, as its language could be read to suggest, it would have had no force. So one is not surprised that it has never been interpreted literally. It has been extended by interpretation first to cover the situation in which an injunction is sought against a party to a pending state-court proceeding, Atlantic Coast Line R.R. v. Brotherhood of Engineers, 398 U.S. 281, 287, 90 S.Ct. 1739, 1743, 26 L.Ed.2d 234 (1970), and then to cover the situation of a disappointed litigant who, having lost in state court, seeks the aid of a federal court to nullify the state court proceeding, not by enjoining the proceeding as such or even by enjoining the parties from continuing with the proceeding--it is too late for either of these remedies--but by enjoining his opponent from enforcing the judgment that the opponent had obtained in the proceeding. County of Imperial v. Munoz, 449 U.S. 54, 101 S.Ct. 289, 66 L.Ed.2d 258 (1980).

However, a stranger to the state court litigation--hence one who cannot be regarded as a litigant in state court, disappointed or otherwise--is not barred. He is not trying to interfere with a state court proceeding in progress, or to rerun his state lawsuit in federal court. He is merely trying to vindicate his rights against a party who obtained a judgment in state court. If he were barred, it would be as if he had been a class member in a state court suit against a defendant class. Hart and Wechler's The Federal Courts and the Federal System 1330 (Bator et al. eds. 1988). Or so it can be argued. The counterargument is that the stranger's suit in federal court is as great an affront to the state court as a federal court suit by a party; if the stranger can raise his federal claims only in state court, that is too bad for him but he is in the same boat as many other litigants.

The Supreme Court has resolved this debate. Only a party, or, what amounts to the same thing in contemplation of the law, one who is in privity with a party, is barred by the Anti-Injunction Act. County of Imperial v. Munoz, supra, 449 U.S. at 59, 60 n. 3, 101 S.Ct. at 292, 293 n. 3; Hale v. Bimco Trading, Inc., 306 U.S. 375, 377-78, 59 S.Ct. 526, 526-27, 83 L.Ed. 771 (1939).

The question of privity is central to this case. Pelfresne concedes that if the raze order issued by the Circuit Court of Walworth County is a lien on the property that he bought, then he is in privity with the defendants in the circuit court action. He further concedes that it is a lien on the property enforceable against him if he knew about the raze order when he bought the property, or if, though he did not know about it, he is treated by Wisconsin law as if he did: in legalese, if he had "constructive notice" of the order.

He may well have had actual notice. Schiessle has been the beneficial owner of the property throughout the elaborate series of transfers that preceded the sale to Pelfresne and that appear to have been motivated by a desire to escape the raze order, and Pelfresne is Schiessle's nephew. Either they are in cahoots or the uncle has tried to pull a fast one on his nephew; the fact that Pelfresne brought this suit to enjoin the raze order just ten days after he bought the property supports the former hypothesis. But there has been no finding of actual notice as yet, so we proceed to the question of constructive notice.

At first glance "constructive notice" may seem another of those unworthy legal fictions that contribute to the law's poor reputation among laymen. It means no notice, and its purpose and effect may therefore seem to be to pretend that a person who did not know something did know it. In fact, however, it is a mainstay of the system of protecting interests, both prior and subsequent, in land by means of a system of public records. One who records his interest in the proper records office is thereby protected against subsequent claimants and need not attempt to publicize that interest in any other way, and he is also protected against any prior claimants who by failing to record their interests had failed to provide notice in the prescribed manner.

But was the Village's raze order properly recorded? It was if it was within the "chain of title" of the property, a term that "includes instruments, actions and proceedings...