Andersen v. Kojo, 82-470

• Decision Date: 23 November 1982
• Docket Number: No. 82-470,82-470
• Citation: 327 N.W.2d 195,110 Wis.2d 22
• Parties: A.C. ANDERSEN, d/b/a Andersen's, Inc., Plaintiff-Appellant, v. Waino E. KOJO and Vernon Bronson, Defendants-Respondents.
• Court: Wisconsin Court of Appeals

Page 195

327 N.W.2d 195

110 Wis.2d 22

A.C. ANDERSEN, d/b/a Andersen's, Inc., Plaintiff-Appellant, v. Waino E. KOJO and Vernon Bronson, Defendants-Respondents.

No. 82-470.

Court of Appeals of Wisconsin.

Submitted on Briefs Oct. 11, 1982.

Opinion Released Nov. 23, 1982.

Opinion Filed Nov. 23, 1982.

Boardman, Suhr, Curry & Field, Madison, for plaintiff-appellant.

Lent, Brush & Associates, S.C., Madison, for defendants-respondents.

Before GARTZKE, P.J., and BABLITCH and DYKMAN, JJ.

DYKMAN, Judge.

Plaintiff appeals from an order denying his petition for leave to sue on a judgment. We hold that the trial court abused its discretion in denying the petition, reverse the order and remand for further proceedings consistent with this opinion.

Plaintiff obtained a judgment against defendants on February 12, 1969, but never executed on the judgment. On June 15, 1981, plaintiff petitioned for leave to sue on the judgment, pursuant to sec. 806.23, Stats. ¹ The trial court determined that plaintiff had not shown "good cause" under sec. 806.23 and denied the petition on the grounds of laches. It found that plaintiff's twelve-year delay in making any effort to collect the judgment was unreasonable; that defendants were entitled to presume, on the basis of plaintiff's inaction, that plaintiff was uninterested in collecting the judgment; and that defendants were prejudiced by the delay in that accumulation of interest had increased the amount due from $6,125.77 to nearly $15,000. ²

Leave to Sue on Judgment

Section 806.23, Stats., provides: "No action shall be brought upon a judgment rendered in any court of this state between the same parties, without leave of the court, for good cause shown, on notice to the adverse party."

The purpose of the "good cause" requirement is to protect the debtor from harassment when there is no reason to believe a later judgment will be more effectively collected than the earlier. First Wisconsin Nat. Bank v. Rische, 15 Wis.2d 564, 568, 113 N.W.2d 416, 418-19 (1962). However, the plaintiff can meet the "good cause" requirement by showing that an action on the judgment is necessary to enforce his or her rights. Id. at 568, 113 N.W.2d at 418. In Rische, the supreme court held that the plaintiff had met the good cause requirement by showing that the twenty-year statute of limitations on the judgment was about to expire and that plaintiff would thereafter be barred from issuing execution or obtaining leave to act on the judgment. Id. at 568, 113 N.W.2d at 419. In Meier v. Purdun, 70 Wis.2d 1100, 1106, 236 N.W.2d 262, 265 (1975), the court held that the plaintiff had met the good cause requirement by showing that the ten-year judgment lien period provided by sec. 270.79, Stats. (1971), had expired, so that the action was necessary to enforce the plaintiff's lien.

In the present case, judgment was entered against defendants in 1969. The judgment remains unpaid. The five-year period within which plaintiff could have issued execution without leave of court has expired. Sec. 815.04(1), Stats. The ten-year judgment lien period has also expired. Sec. 806.15(1), Stats. An action on the judgment is necessary to preserve plaintiff's lien rights and his right to issue execution on the judgment. Under Rische and Meier, this constitutes good cause for leave to act on the judgment under sec. 806.23.

The trial court held that plaintiff had not shown good cause because there was no indication that plaintiff had ever attempted to collect on the judgment. The holdings in Rische and Meier did not turn on whether the plaintiffs had previously attempted collection. The appellant's brief in Meier indicates that the appellant unsuccessfully attempted to settle the matter but did not attempt to enforce his judgment by execution or garnishment. Rische and Meier thus cannot be distinguished from the present case on the basis of collection attempts. The appellant's brief in Meier discloses that he had been advised by counsel that collection was not worthwhile pursuing. Plaintiff's brief in the present case similarly states that he was informed that neither judgment debtor would be able to satisfy the judgment and therefore did not seek execution on the judgment. The policy behind sec. 806.23, Stats., would be defeated if courts required judgment creditors to uselessly harass judgment debtors in order to preserve their rights to enforce their judgments. Plaintiff's delay in attempting to enforce the judgment is more appropriately addressed under defendants' contention that plaintiff is guilty of laches.

Laches

The equitable doctrine of laches is a recognition that a party ought not to be heard when he has not asserted his right for an unreasonable length of time or that he was lacking in diligence in discovering and asserting his right in such a manner so as to place the other party at a disadvantage.

Bade v. Badger Mut. Ins. Co., 31 Wis.2d 38, 47, 142 N.W.2d 218, 222 (1966). The doctrine of laches was originally considered peculiar to courts of equity and not applicable to actions at law. However, the Wisconsin legislature provided early that equitable defenses could be raised in legal actions. Sec. 12, ch. 125, Rev.Stats. (1858). ³ See Meske v. Wenzel, 247 Wis. 598, 606, 20 N.W.2d 654, 657 (1945).

The elements of laches are: " ' "(1) unreasonable delay, (2) lack of knowledge on the part of the party asserting the defense that the other party would assert the right on which he bases his suit, and (3) prejudice to the party asserting the defense in the event the action is maintained." ' " Schafer v. Wegner, 78 Wis.2d 127, 132, 254 N.W.2d 193, 196 (1977) (citations omitted).

The trial court erred in finding that defendants would be prejudiced by having to pay interest on the judgment. That finding is a conclusion, to which we owe no deference even though it is denominated a fact. Crowley v. Knapp, 94 Wis.2d 421, 429, 288 N.W.2d 815, 819 (1980). Judgment debtors must pay interest on money owed judgment creditors. Sec. 814.04(4), Stats. Interest accrues from the time the decision is rendered to the time the judgment is paid. Sec. 815.05(8), Stats. ⁴ Interest is customarily paid for the use of another's money. In today's economy, the payment of interest at only seven percent per year for the use of another's money cannot be considered prejudicial. Defendants are not prejudiced by the requirement that they pay interest on the judgment. The third element of laches is not met. Plaintiff's action is not barred by laches.

The decision whether to grant a motion for leave to act on a judgment is discretionary with the trial court and reversible only for an abuse of discretion. Meier, 70 Wis.2d at 1106, 236 N.W.2d at 265. However, a trial court abuses its discretion when it fails to properly apply the principles of law governing a situation. Id. The trial court erred in determining that nonpayment of the judgment plus expiration of lien rights was not "good cause" under sec. 806.23, Stats., and in determining that defendants would be prejudiced by having to pay interest on the judgment. The trial court's denial of plaintiff's petition for leave to act on the judgment constituted an abuse of discretion.

Order reversed and cause remanded for further proceedings consistent with this opinion.

1 Plaintiff originally petitioned for leave to issue execution on the judgment, pursuant to sec. 815.04(1), Stats. He later moved to withdraw that petition and...