GMAC Mortg. Corp. v. Gisvold

• Decision Date: 28 January 1998
• Docket Number: No. 96-1663,96-1663
• Citation: 215 Wis.2d 459,572 N.W.2d 466
• Parties: GMAC MORTGAGE CORPORATION OF PENNSYLVANIA, f/k/a GMAC Mortgage Corporation of Iowa, Plaintiff, Randall Cudd and Jim Claycomb, Intervenors-Respondents-Petitioners, v. Michael GISVOLD and Drew Gisvold, Defendants-Appellants, d United States of America, U.S. Attorney General, Chicago Title Insurance Company, a/k/a Old Republic National Insurance Company, Title Insurance Company of Minnesota, Defendants.
• Court: Wisconsin Supreme Court

Page 466

572 N.W.2d 466

215 Wis.2d 459

GMAC MORTGAGE CORPORATION OF PENNSYLVANIA, f/k/a GMAC Mortgage Corporation of Iowa, Plaintiff Randall Cudd and Jim Claycomb, Intervenors-Respondents-Petitioners, v. Michael GISVOLD and Drew Gisvold, Defendants-Appellants, ^d United States of America, U.S. Attorney General, Chicago Title Insurance Company, a/k/a Old Republic National Insurance Company, Title Insurance Company of Minnesota, Defendants.

No. 96-1663.

Supreme Court of Wisconsin.

Argued Oct. 7, 1997.

Decided Jan. 28, 1998.

For the intervenors-respondents-petitioners there were briefs by Catherine R. Quiggle and Rodli, Beskar, Boles & Krueger, S.C., River Falls and oral argument by Catherine R. Quiggle.

For the defendants-appellants there was a brief by R. Michael Waterman and Mudge, Porter, Lundeen & Seguin, S.C., Hudson and oral argument by R. Michael Waterman.

¶1 N. PATRICK CROOKS, Justice

Petitioners seek review of a published decision of the court of appeals, ¹ reversing an order of the circuit court for St. Croix County, the Honorable Eric J. Lundell presiding. The circuit court excused the petitioners' non-compliance with Wis. Stat. § 846.17 (1993-94), ² which requires the purchaser at a foreclosure sale to submit the balance of the purchase price within ten days of confirmation of the sale, and afforded the petitioners an opportunity to complete the purchase in accordance with § 846.17. The circuit court further determined that the redemption period allowed for the respondents had expired and, consequently, their attempt to redeem the property was not valid.

¶2 The court of appeals reversed, concluding the circuit court had no equitable authority to waive the petitioners' statutorily imposed payment requirements. The court of appeals reasoned the language in Wis. Stat. § 846.17, commanding forfeiture of the purchasers' deposit and resale of the property if the ten-day time period is not complied with, is mandatory. As such, the petitioners had forfeited their ten percent deposit. The court of appeals further determined that the respondents had properly redeemed the property.

¶3 Upon review, we conclude that the respondents did not successfully redeem the property when they paid the balance of their mortgage on March 19, 1996. We further conclude that the language of Wis. Stat. § 846.17 is mandatory insofar as it requires forfeiture of a purchaser's deposit and resale of the property in the event the purchaser does not comply with the ten-day time limitation. Therefore, when a purchaser fails to submit the balance of the purchase price within ten days of confirmation of the sale, a circuit court has no equitable authority to excuse non-compliance and must adhere to the statute by ordering forfeiture of the purchaser's deposit and resale of the property. We also conclude that Wis. Stat. § 846.165 contemplates notice to the purchaser at a foreclosure sale of when the sale is confirmed, when the mortgagor's redemption period ends, and when the purchaser's ten-day period for payment of the purchase price balance expires. Finally, we conclude that the petitioners complied with the statutory mandate of Wis. Stat. § 846.17 because they submitted the balance of the purchase price within ten days of the effective date of the confirmation of the sale which was June 5, 1996. Accordingly, we reverse the decision of the court of appeals.

I.

¶4 The relevant facts, though lengthy and somewhat confusing, are not in dispute. In 1992, respondents Michael and Drue Gisvold defaulted on their home mortgage held by GMAC Mortgage Corporation (GMAC). GMAC initiated foreclosure proceedings, and a foreclosure judgment was entered on April 27, 1993, in favor of GMAC. A sale of the home was subsequently scheduled for the following November. The sale did not transpire because Drue Gisvold filed a Chapter 13 bankruptcy petition shortly before the scheduled sale. That bankruptcy petition was voluntarily dismissed on January 5, 1994.

¶5 A foreclosure sale was thereafter scheduled and was conducted on March 15, 1994. Petitioners Randall Cudd and Jim Claycomb were the successful bidders at the sale. They deposited ten percent of the purchase price, and the sale was subsequently confirmed on March 30, 1994. Cudd and Claycomb submitted the remaining balance of the purchase price to the clerk of courts within ten days of the confirmation of the sale pursuant to Wis. Stat. § 846.17.

¶6 On April 6, 1994, the Gisvolds filed a motion to vacate the circuit court's order confirming sale, arguing they did not receive sufficient notice of the confirmation hearing. Receiving no objection to the motion, the circuit court vacated the order confirming sale on June 3, 1994.

¶7 The confirmation hearing was rescheduled for July 8, 1994. Michael Gisvold filed a Chapter 11 bankruptcy petition prior to the scheduled hearing date, and the confirmation hearing was canceled. GMAC brought a motion before the bankruptcy court for relief from the automatic stay of the foreclosure proceeding initiated by the filing of the bankruptcy petition. On February 13, 1995, the bankruptcy court granted GMAC's motion for relief.

¶8 The confirmation hearing was again rescheduled and set for April 6, 1995. The circuit court denied GMAC's motion to confirm the foreclosure sale in an order dated April 17, 1995. However, the circuit court's order provided that GMAC could schedule another foreclosure sale and commence posting and publishing notice of such sale.

¶9 A second foreclosure sale was conducted on June 13, 1995, and it is the events surrounding the confirmation of this sale which provide the basis for the dispute before us now. At the sale, Cudd and Claycomb were once again the successful bidders. They deposited ten percent of the purchase price, and a confirmation hearing was scheduled for June 27, 1995. Prior to the scheduled hearing, the foreclosure proceeding was stayed due to Drue Gisvold filing another bankruptcy petition seeking relief under Chapter 13 of the Bankruptcy Code. The bankruptcy petition was dismissed voluntarily on July 25, 1995, and the confirmation hearing was rescheduled for October 3, 1995. Again, the hearing did not take place because Michael Gisvold filed a bankruptcy petition. That bankruptcy petition was voluntarily dismissed on October 19, 1995.

¶10 The confirmation hearing was rescheduled for a third time and set for December 27, 1995. This hearing did take place. As a purchaser of the foreclosed property, Cudd was present at the hearing. ³ The circuit court granted GMAC's application for confirmation of the sale. However, in accord with an in-court stipulation between GMAC and the Gisvolds, the circuit court stayed entry of the confirmation order until January 15, 1996, to allow the Gisvolds additional time to redeem the property. ⁴ The order indicated that if the Gisvolds did not redeem the property by January 15, 1996, at 4:00 p.m., the sale would be approved and confirmed effective January 16, 1996, and Cudd and Claycomb would have ten days from January 16, 1996, to pay the balance of the purchase price to complete the sale.

¶11 On January 12, 1996, GMAC and the Gisvolds agreed to amend their stipulation and extend the Gisvolds' redemption period for an additional two days. The circuit court approved the stipulation on January 12, 1996, and amended its original order in light of the fact that January 15, 1996, was a federal holiday. Because all banks would be closed on that day, it would impact the Gisvolds' ability to transfer funds to redeem the property. The specific terms of the amended order provided that if the Gisvolds did not redeem the property by January 17, 1996, at 4:00 p.m., the foreclosure sale would be approved and confirmed effective January 18, 1996, and Cudd and Claycomb would thereafter be given ten days to deposit the remaining balance of the purchase price with the clerk of courts to complete the sale.

¶12 On January 17, 1996, approximately three hours before the Gisvolds' redemption period was to expire, Michael Gisvold filed yet another bankruptcy petition, seeking relief under Chapter 13 of the Bankruptcy Code. The bankruptcy petition was voluntarily dismissed on March 12, 1996. Cudd and Claycomb did not receive notice of the bankruptcy dismissal.

¶13 On March 19, 1996, in an attempt to redeem their property, the Gisvolds paid the balance due on their mortgage to the clerk of courts for St. Croix County. It was only after the Gisvolds made this payment that Cudd and Claycomb became aware the bankruptcy petition had been dismissed. At no point during the period between the December 27, 1995, confirmation hearing and the Gisvolds' attempt to redeem the property on March 19, 1996, did Cudd and Claycomb submit the balance of the purchase price to the clerk of courts to complete the sale.

¶14 GMAC brought a motion for a determination of whether the Gisvolds had successfully redeemed their property or whether Cudd and Claycomb still had a right to purchase the property. GMAC took no position regarding either party's right to the property. The circuit court determined that the period allowed for redemption in accord with the stipulation had expired and, therefore, the Gisvolds had not properly redeemed the property. The circuit court further concluded that Cudd and Claycomb's failure to submit the purchase price within ten days of the confirmation of the sale was excusable in light of the fact that they had not been notified of the dismissal of the bankruptcy petition and thus did not know when the ten-day period for submitting the balance of the purchase price expired. The circuit court exercised its discretion and held that Cudd and Claycomb should be afforded an opportunity to purchase the property. Accordingly, the circuit court ordered the sale confirmed as of June 5, 1996, and determined Cudd and Claycomb had ten days from that date to submit the balance of the purchase price. ⁵ ...