Board of Regents of University of Wisconsin System v. Mussallem

• Decision Date: 04 March 1980
• Docket Number: No. 77-422,77-422
• Citation: 94 Wis.2d 657,289 N.W.2d 801
• Parties: BOARD OF REGENTS OF the UNIVERSITY OF WISCONSIN SYSTEM, a corporation, d/b/a the University of Wisconsin-Madison, Plaintiff-Respondent, v. Victor A. MUSSALLEM, Defendant-Appellant.
• Court: Wisconsin Supreme Court

Page 801

289 N.W.2d 801

94 Wis.2d 657

BOARD OF REGENTS OF the UNIVERSITY OF WISCONSIN SYSTEM, a

corporation, d/b/a the University of

Wisconsin-Madison, Plaintiff-Respondent, v. Victor A. MUSSALLEM, Defendant-Appellant.

No. 77-422.

Supreme Court of Wisconsin.

Submitted on Briefs Feb. 7, 1980.

Decided March 4, 1980.

[94 Wis.2d 660] Ralph A. Kalal, Madison, for defendant-appellant.

John P. Schuster and Schuster & Carroll, Madison, for plaintiff-respondent.

COFFEY, Justice.

The plaintiff, Board of Regents of the University of Wisconsin System, commenced an action on January 21, 1977 for collection of loans made to the defendant while attending law school (during the period from September, 1965 to June, 1968). This is an appeal from an order of the trial court denying the defendant-appellant's, Victor Mussallem, motions: (1) to dismiss on the grounds that the cause of action was barred by the six-year statute of limitations or alternatively on the grounds of lack of subject matter jurisdiction; (2) to strike the affidavits in support of the plaintiff-respondent's, Board of Regents, motion for summary judgment; (3) to compel discovery and for production of documents, and the granting of judgment in favor of the plaintiff.

In its complaint the plaintiff Board of Regents alleged the following:

"That on or about September 9, 1966, the defendant and plaintiff entered into an agreement whereby the plaintiff would, subject to the terms and conditions of a signed note, a true and correct copy of which is attached hereto, loan certain sums of money to said defendant for the purpose of financing his education.

"That on or about the following dates, additional moneys were advanced to said defendant, under the aforementioned agreement, said additional moneys becoming a part of the principal due under the note evidencing said agreement: 12-14-66; 1-25-67; 9-14-67; 1-8-68; 9-10-68.

"That demand has been made for payments under the above agreement, but none have been forthcoming and, under the terms of said agreement, the defendant is therefore in default.

"That, under the terms of the above-described agreement, as set forth in the attached note, all of the money loaned to the defendant, along with interest at three percent (3%) per annum, is now due and owing, the total amount due being $5729.63, the principle amount being $4630.00 of said total, the interest through February, 1977, having been added thereto.

"That, under the terms of said agreement, the plaintiff has declared the above balance to be due in its entirety."

The plaintiff demanded judgment in the amount of $5,729.63, plus costs and interest from March 1, 1977 until the date of payment.

The defendant moved to dismiss the plaintiff's cause of action, pursuant to sec. 802.06, Stats., on the grounds that it was barred by the six-year statute of limitation governing actions on contracts, obligations or liabilities (sec. 893.19(3), Stats. ¹). The court, in denying the defendant's motion to dismiss, found it to be an instrument under seal and therefore the 20-year statute of limitation (sec. 893.16(2), Stats. ²), controlled rather than the six-year statute, as Mussallem alleged. Following the denial of his motion to dismiss, the defendant filed an answer, asserting a general denial and also again raising the six-year statute of limitation as an affirmative defense.

Thereafter, the plaintiff brought a motion for summary judgment contending that ". . . there is no genuine issue as to any material fact and the plaintiff is entitled to judgment as a matter of law." In response to the plaintiff's motion for summary judgment, the defendant moved for an order:

"1. Striking the 'Affidavit of Regular and Usual Procedure' of Marjorie K. Buchanan annexed to Plaintiff's Motion for Summary Judgment, upon the grounds that said affidavit contained no evidentiary facts relevant to this action which would be admissable in evidence under Wisconsin Statute § 904.06(2).

"2. Striking the Supplemental Affidavit of Charles S. Lueck in support of plaintiff's Motion for Summary Judgment, upon the grounds that Paragraphs Three, Four, Five and Six of said affidavit are made upon information and belief, contrary to Wisconsin Statute § 802.08(3), and to strike the words 'under seal' from Paragraph Four of said affidavit, upon the ground that said language is a legal conclusion rather than a statement of fact."

In addition, he also filed motions:

1. to compel the plaintiff to answer the defendant's interrogatories, No. 4(c) and No. 4(c)(1), ³ and also to produce certain documents (i. e., the appellant's loan application forms and the note); and

2. to dismiss the cause of action on the grounds that the court was without subject matter jurisdiction as the respondent failed The plaintiff, in responding to the motion to produce, pointed out that the defendant had previously received a copy of the note appended to the complaint (Exhibit A) and that he had knowledge that the loan application forms were available for inspection at the office of the plaintiff's attorney.

to serve a Notice of Right to Cure as required by secs. 425.104 and 425.105, Stats., until after the commencement of the present action on September 30, 1977.

The court denied the defendant's motions and entered judgment in favor of the plaintiff, Board of Regents, reciting the following in its findings:

1. the appellant had waived his right to the defense of lack of subject matter jurisdiction by not raising it "before pleading" or by including it in a "responsive pleading" (as required by sec. 802.06(2), Stats., ⁴);

2. ". . . all relevant documents were made available to the defendant . . ." and thus there was no need for an order to compel production of the documents;

3. the affidavits made in support of the motion for summary judgment were made upon personal knowledge and thus permissible, pursuant to sec. 802.08(3), Stats. ⁵

4. "The defendant had not denied the existence of the obligation to pay, that he is the maker of the note or that the amount specified (or 'sum certain') is accurate," thus the plaintiff is entitled to judgment as " . . . (n)o material facts are in dispute, no competing inferences can arise, and the law applicable to this situation is clear."

The defendant appeals from the order denying his motions and granting judgment.

ISSUES

1. Is sec. 425.104, Stats., and/or sec. 425.105, Stats., dealing with Notice to Cure Default of the Wisconsin Consumer Act, applicable to student loans granted under the control of a university board of regents or trustees?

2. If secs. 425.104 and 425.105, Stats., are applicable, did the plaintiff's failure to comply with the provisions deprive the trial court of subject matter jurisdiction?

3. Does the six-year statute of limitation, or the twenty-year statute of limitation for contracts under seal apply in this case?

4. Did the trial court err in granting the motion for summary judgment?

5. Did the trial court err in denying the defendant's motion to strike the affidavits in support of the plaintiff's motion for summary judgment on the grounds that they were not based on the personal knowledge 6. Did the trial court err in refusing to order discovery of documents which the defendant contends were essential to determining the character of the document which is the basis of the suit?

of the affiants as required by sec. 802.08(3), Stats.?

The appellant, in seeking to avoid his obligation to repay his $4,630 student loan for a law school education, contends that ch. 425, Wisconsin Consumer Act, applies in this case and the failure of the plaintiff to serve a notice of right to cure a default before commencement of the action to recover on the loans deprived the trial court of subject matter jurisdiction.

The general threshold question of the issues facing this court is whether the Wisconsin Consumer Act and specifically sec. 425.105, Stats., applies to college student loans provided through the University.

The Wisconsin Consumer Act was enacted by the Wisconsin legislature as ch. 239 of the Session Laws (1971). The Act constituted a comprehensive revision of the law governing consumer transactions. The underlying purposes and policies of the Act, as stated in sec. 421.102(2), Stats., are as follows:

"(a) To simplify, clarify and modernize the law governing consumer transactions;

"(b) To protect customers against unfair, deceptive, false, misleading and unconscionable practices by merchants;

"(c) To permit and encourage the development of fair and economically sound consumer practices in consumer transactions; and

"(d) To coordinate the regulation of consumer credit transactions with the policies of the federal consumer credit protection act."

The provision of the Act which the defendant contends applies in this case is sec. 425.105, Stats., which provides in part as follows:

"425.105 Cure of default. (1) A merchant may not accelerate the maturity of a consumer credit transaction, commence any action except as provided in s. 425.205(6), or demand or take possession of collateral or goods subject to a consumer lease other than by accepting a voluntary surrender thereof (s. 425.204), unless the merchant believes the customer to be in default (s. 425.103), and then only upon the expiration of 15 days after a notice is given pursuant to s. 425.104 if the customer has the right to cure under this section.

"(2) Except as provided in sub. (3), for 15 days after such notice is given, a customer may cure a default under a consumer credit transaction by tendering the amount of all unpaid instalments due at the time of the tender, without acceleration, plus any unpaid delinquency or deferral charges, and by tendering performance necessary to cure any default other than nonpayment of amounts due. The act of curing a default restores to the customer his rights under the agreement as though no default had occurred.

"(3) A right to cure shall not exist...