Family Sav. & Loan Ass'n v. Barkwood Landscaping Co., Inc.
| Decision Date | 13 February 1980 |
| Docket Number | 77-530,Nos. 77-046,s. 77-046 |
| Citation | 286 N.W.2d 581,93 Wis.2d 190 |
| Court | Wisconsin Supreme Court |
| Parties | FAMILY SAVINGS & LOAN ASSOCIATION, a Wisconsin Corporation, Plaintiff- Respondent, v. BARKWOOD LANDSCAPING CO., INC., D & K Construction Corporation, Lakeshore Commercial Finance Corporation, Robert W. Nelson, Inc., and Sun Valley Pools, a Division of Water World Industries, Inc., Defendants-Appellants, R. C. Hansen and Patricia Hansen, his wife, et al., Defendants. Joseph P. Trapp, Stephen A. Hartman, and Trapp & Hartman, S. C., Intervenors-Respondents. FAMILY SAVINGS & LOAN ASSOCIATION, a Wisconsin Corporation, Plaintiff- Respondent, v. LAKESHORE COMMERCIAL FINANCE CORPORATION, Sun Valley Pools, a Division of Water World Industries, Inc., Robert W. Nelson, Inc., Barkwood Landscaping Co., Inc., and D & K Construction Corporation, Defendants-Appellants, R. C. Hansen and Patricia Hansen, his wife, et al., Defendants, Greenbrier Apartments, a Limited Partnership, Purchaser-Respondent. |
Weiss, Steuer, Berzowski & Kriger, Milwaukee, on brief, for defendants-appellants; Robert K. Steuer (argued), Milwaukee, of counsel, Walther & Halling, Hayes & Hayes and Chronus & Kotsonis, Milwaukee, co-counsel in No. 77-046.
Cook & Franke, S. C., Milwaukee, on brief, for plaintiff-respondent; John J. Ottusch (argued), Milwaukee, of counsel in Nos. 77-046 and 77-530.
Frisch, Dudek & Slattery, Ltd., Milwaukee, on brief, for intervenors-respondents; Thomas J. Arenz and Lynn R. Laufenberg (argued), Milwaukee, of counsel in No. 77-046.
Weiss, Steuer, Berzowski & Kriger, Milwaukee, on brief, for defendants-appellants; Robert K. Steuer (argued), Milwaukee and Scott B. Fleming, Milwaukee, of counsel; Walther & Halling, Hayes & Hayes and Chronus & Kotsonis, Milwaukee, co-counsel in No. 77-530.
Case No. 77-046 is an appeal from a judgment of foreclosure entered June 30, 1977, from an order setting aside judgment, sale, and confirmation entered March 31, 1977, and from that portion of an order entered June 7, 1977, denying appellants' motions which requested the court find the funds held by the receiver on February 28, 1977, be considered as surplus funds to which the plaintiff had waived all claim by virtue of its prior bid or, in the alternative, require an upset price on resale equal to the amount of the old judgment. The companion case, No. 77-530, is an appeal from an order of the same court confirming sale and directing payment of the receiver's balance and denying the appellants' motion for a partial stay pending their appeal in No. 77-046.
The principal issue raised on appeal concerns the trial court's authority to vacate an earlier order confirming the sheriff's sale on foreclosure and to order a new sale.
Family Savings and Loan Association (Family) filed a foreclosure action in the Circuit Court for Ozaukee County. The summons and complaint named six mortgagors, one subordinate mortgagee, nineteen construction lien claimants, and seventy-seven tenants of the property as defendants and demanded a judgment of foreclosure and sale of the mortgaged premises. The subordinate mortgagee, Lakeshore Commercial Finance Corporation (Lakeshore), and four of the lien claimants Barkwood Landscaping Co., Inc. (Barkwood), D & K Construction Corporation (D & K), Robert W. Nelson, Inc. (Nelson), and Sun Valley Pools (Sun Valley) are the appellants.
The property subject to the foreclosure action consisted of seventy-one units in a condominium complex known as Greenbrier I and thirty acres of adjacent vacant land located in the city of Mequon, Ozaukee County. The property was security for four separate mortgage loans made to the six mortgagors in an amount in excess of two million dollars. Family claimed the mortgage loans were in default for failure to escrow $12,026.98 to cover real estate taxes on the property and declared the full principal and accrued interest due and payable.
Contemporarily, Family filed an order to show cause why a receiver should not be appointed to collect the rents and proceeds and to prevent waste of the premises known as Greenbrier I during pendency of the foreclosure proceedings. At a hearing on April 2, 1975, the court appointed Ralph J. Huiras receiver of the mortgaged premises.
Ultimately the answers, counterclaims, third-party complaint, and cross-complaint were withdrawn, the redemption period waived, and by stipulation the matter proceeded as a default action. On December 21, 1976, the court ordered a judgment of foreclosure and sale with regard to the four mortgages and found, upon the undisputed testimony of the president of Family, that the balance due on the mortgages was $2,630,468.11, "exclusive of its costs, disbursements, attorneys fees, and exclusive of a report from the Receiver which may show a plus balance or a minus balance, depending upon what items have been paid." The court did not consider or determine plaintiff's attorney fees and receiver fees. The court ordered an immediate sale after publication.
On December 24, 1976, Circuit Judge Milton Meister signed the findings of fact and conclusions of law in this matter. On December 27, 1976, Family's attorney submitted the judgment of foreclosure to the clerk of courts for entry, but the amount of the submitted judgment was $2,786,350.27. This was $155,882.16 higher than that ordered by Judge Meister and included costs in the amount of $61,786, receiver fees of $9,327.50, attorney fees of $31,993.43, and real estate taxes of $52,775.23. 1
The property was sold at sheriff's sale in two parcels for a total of $2,802,613.41, which included the judgment balance of $2,786,350.27, plus 9 percent interest to the date of sale and costs incident to additional taxes and insurance to the date of sale.
Lakeshore and Barkwood claim that the first time they received notice that a judgment of foreclosure had been entered on December 24, 1976, the amount of the judgment, and that a sheriff's sale had been held was when they received notice Family would move on February 28, 1977, for an order confirming the sale.
The hearing on confirmation of the sheriff's sale was held February 28, 1977, before J. Tom Merriam, Acting Circuit Judge. Judge Meister had retired. The receiver filed his accounting, and Family requested that the court confirm the sheriff's sale. Counsel for Lakeshore and Barkwood stated that he had no objection to confirmation of the sheriff's sale in the amounts of $588,283.23 for the parcel of vacant land and $2,214,330.18 for the parcel with the condominium units because the sale was in the best interests of all the creditors and all people with an interest in the real estate, but noted he had "further objections" he wanted to state on the record "after the confirmation." The court confirmed the sale.
Immediately after the court ordered confirmation of the sale, counsel for Lakeshore and Barkwood stated to the court that the judgment of foreclosure had been entered without notice to them and that there were irregularities in the judgment in that the amount of the judgment included not only the amount the court found due for principal and interest but also included additional amounts for costs and fees which explicitly had not been determined by the court, although the court ordered those amounts to be set out in the judgment. No subsequent hearing on determination of costs and fees had ever been held. Lakeshore and Barkwood requested the court to require Family, as purchaser at the sale, to give a receipt in payment of $2,630,468.11 2 and that the remainder of the purchase price be paid into court pending the adjudication and proof of any additional costs and making them part of the court judgment.
On March 3, 1977, Lakeshore and Barkwood filed a motion for relief from the judgment of foreclosure, pursuant to sec. 806.07(1)(a) and (c), Stats., 3 seeking to delete from the judgment the amounts awarded for costs, fees, and taxes which were not supported in the record. That same day the court entered an order prepared and submitted by Lakeshore and Barkwood confirming the sheriff's sale held February 18, 1976, and ordering Family to tender the purchase price excess over principal and interest in the sum of $172,145.30 to the clerk of courts, pending further action of the court. Family objected to the order confirming the sheriff's sale on the grounds that: (1) a motion for relief from the foreclosure judgment was scheduled for hearing, and if the court confirmed the sale when it proposed to review the judgment, it would be prejudicial to Family; (2) if the court reviewed the judgment, it must set aside all proceedings held thereafter based on the judgment, including the sheriff's sale; and (3) pursuant to sec. 846.17, Stats., 4 the purchaser has the election, not a requirement, to pay the purchase price within ten days after confirmation, and if the purchaser fails to do so, all deeds are destroyed and a resale shall be had of the premises.
The court found the judgment of foreclosure to be in error because there existed discrepancies between the findings of fact entered by the court and the judgment. The court ordered the prior judgment set aside and a new judgment entered in conformity with the findings of fact. The court also set aside the February 8, 1977, sheriff's sale and ordered a new sale, citing Prudential Insurance Co. v. Cuttone, 227 Wis. 48, 277 N.W. 630 (1938), as authority for the disposition.
Family engaged another lawyer to work on the case and filed a motion on April 12, 1977, requesting that the court order a new foreclosure judgment and sale, along with approval of the receiver's accounts, allowance of his expenses and attorney fees, and for disbursement of the evidentiary balance of the receiver's account.
On May 26, 1977, Lakeshore and Barkwood filed a motion requesting that the court determine the sum of $69,991.15,...
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... ... Corp. v. Royal Elec. Mfg. Co., Inc., 66 Wis.2d 577, 589, 225 N.W.2d 648 ... See Family Sav. & Loan Ass'n v. Barkwood Landscaping Co., ... ...
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...court has the equitable authority to exercise discretion throughout the proceedings. See Family Sav. & Loan Ass'n v. Barkwood Landscaping Co., Inc., 93 Wis. 2d 190, 202, 286 N.W.2d 581 (1980). This discretion extends even after confirmation of sale, if necessary to provide "`that no injusti......
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