Prince Corp. v. Vandenberg

Citation364 Wis.2d 457,868 N.W.2d 599,2015 WI App 55
Decision Date16 June 2015
Docket Number2014AP2295.,Nos. 2014AP2097,s. 2014AP2097
CourtCourt of Appeals of Wisconsin
Parties PRINCE CORPORATION, Plaintiff–Intervenor–Respondent, v. James N. VANDENBERG, Defendant, Van De Hey Real Estate, LLC, Garnishee–Defendant–Cross–Claimant–Respondent, Sharon Kempen, Sandra Schmit and Mark Vandenberg, Intervenors–Cross–Claim Defendants–Third–Party Plaintiffs–Appellants, v. BMO Harris Bank (f/k/a M & I Marshall & Isley ) and State of Wisconsin, Third–Party Defendants, Wisconsin Department of Revenue, Third–Party Defendant–Respondent. Prince Corporation, Plaintiff–Appellant, v. James N. Vandenberg, Defendant, Van De Hey Real Estate, LLC, Garnishee–Defendant–Cross–Claimant–Respondent, Sharon Kempen, Sandra Schmit and Mark Vandenberg, Intervenors–Cross–Claim Defendants–Third–Party Plaintiffs–Respondents, v. BMO Harris Bank (f/k/a M & I Marshall & Isley ) and Wisconsin Department of Revenue, Third–Party Defendants, State of Wisconsin, Third–Party Defendant–Respondent.

On behalf of the plaintiff-appellant, Prince Corporation, the cause was submitted on the briefs of Douglas W. Rose, Lora L. LoCoco, and Ryan L. Kehl of Rose & deJong, S.C., Milwaukee.

On behalf of the intervenors-cross-claim defendants-third-party plaintiffs-appellants, the cause was submitted on the briefs of George Burnett of Law Firm of Conway, Olejniczak & Jerry, S.C., Green Bay.

On behalf of the plaintiff-intervenor-respondent, Prince Corporation, the cause was submitted on the brief of Douglas W. Rose, Lora L. LoCoco, and Ryan L. Kehl of Rose & deJong, S.C., Milwaukee.

On behalf of the intervenors-cross-claim defendants-third-party plaintiffs-respondents, the cause was submitted on the brief of George Burnett of Law Firm of Conway, Olejniczak & Jerry, S.C., Green Bay.

On behalf of the third-party defendant-respondent, Wisconsin Department of Revenue, the cause was submitted on the briefs of Brad D. Schimel, attorney general, and S. Michael Murphy, assistant attorney general.

Before STARK and HRUZ, JJ., and THOMAS CANE, Reserve Judge.

STARK, J.

¶ 1 James Vandenberg, Sharon Kempen, Sandra Schmit, and Mark Vandenberg owned real property as tenants in common. They entered into a land contract to sell the property to Van De Hey Real Estate, LLC. Thereafter, Prince Corporation, which had previously obtained and docketed a money judgment against James Vandenberg, sought to garnish a portion of the final payment due under the land contract.1 The circuit court initially granted Prince's request; however, it reconsidered its decision after Kempen, Schmit, and Mark Vandenberg (the Intervenors) intervened in the garnishment action and filed a third-party complaint against the Wisconsin Department of Revenue (DOR), which had two outstanding tax liens against Vandenberg. The court ultimately entered an order permitting the DOR, rather than Prince, to garnish $85,425 of the final land contract payment.

¶ 2 Prince and the Intervenors separately appealed from the order allowing the DOR to garnish the final land contract payment.2 They both argue the circuit court erred by allowing the DOR to garnish the funds because the DOR never filed a garnishment summons and complaint. In addition, Prince argues the circuit court erred because Prince obtained a first priority lien on the funds by docketing its money judgment and then filing a garnishment action. Prince also argues the circuit court erroneously exercised its discretion by reconsidering its prior decision. The Intervenors argue: (1) the final land contract payment is not subject to garnishment; (2) the garnishable amount, if any, should be limited to one-fourth of the final payment; and (3) the circuit court erred in denying the Intervenors' motion for partition. We reject each of these arguments and affirm the circuit court's order.

BACKGROUND

¶ 3 Prince obtained a $165,000 judgment against Vandenberg in Brown County on May 6, 2010. The judgment was docketed the same day. Prince made various efforts to collect on the judgment, none of which were successful.

¶ 4 Vandenberg and the Intervenors owned a parcel of property in Brown County as tenants in common, with each owning a one-fourth interest. On July 14, 2011, they entered into a land contract to sell the property to Van De Hey. The total sale price was $341,700, to be paid in three equal installments of $113,900. The first payment was due when the land contract was executed, the second payment was due on October 1, 2011, and the final payment was due on April 15, 2012. The contract provided that, following the final payment, Vandenberg and the Intervenors would deliver to Van De Hey a "Warranty Deed in fee simple of the property, free and clear of all liens and encumbrances[.]"

¶ 5 In October 2011, an attorney contacted Prince and asked it to sign a "Partial Release of Judgment" related to the Brown County property. Prince apparently declined to sign the release and instead filed a nonearnings garnishment action on February 17, 2012, naming Vandenberg as defendant and Van De Hey as garnishee defendant. Prince asserted it was entitled to garnish the entirety of the final land contract payment.

¶ 6 Van De Hey answered Prince's complaint on March 7, 2012, conceding it had possession or control of property belonging to Vandenberg. However, Van De Hey asserted that property was limited to one-fourth of the final land contract payment plus interest, or $28,788.34. In response, Prince filed an "Affidavit of Counsel" asserting the garnishable amount was one-fourth of the entire land contract price, or $85,425. Prince also filed a motion to compel payment.

¶ 7 Thereafter, the Intervenors successfully moved to intervene in the garnishment action. Van De Hey then filed a cross-claim against Vandenberg and the Intervenors for specific performance of the land contract.

¶ 8 On November 6, 2012, the circuit court granted Prince's motion to compel payment. The court reasoned there was "little doubt" Prince had a valid and enforceable lien against Vandenberg that extended "not only to actual real estate owned, but also, proceeds from the sale of any ownership interest." The court further concluded Prince was "entitled to one-fourth of ... Vandenberg's entire interest in the land sale" and was "not limited to one-fourth of the final land sale payment." Accordingly, the court ordered Van De Hey to remit $85,425 of the final land contract payment to Prince. The November 6 order did not address Van De Hey's cross-claim for specific performance, nor did it state it was a final order for purposes of appeal.

¶ 9 The Intervenors subsequently moved to stay the November 6 order pending appeal. During a January 4, 2013 hearing, the circuit court initially granted the motion to stay, but it then lifted the stay after the parties stipulated the November 6 order was not a final order for purposes of appeal. The court ordered the parties to mediate their outstanding disputes, but they were unable to reach a settlement.

¶ 10 On November 14, 2013, the Intervenors filed a third-party summons and complaint naming the DOR as a third-party defendant.3 In its answer to the third-party complaint, the DOR stated it "claim[ed] an interest in the Property" pursuant to three delinquent tax warrants against Vandenberg: two that were docketed on January 4, 2010, in the amounts of $64,719.47 and $47,935.77, and a third that was docketed on August 20, 2012, in the amount of $45,320.67. The DOR requested judgment "in accordance with the foregoing [.]" It is undisputed that the first two tax warrants were docketed before Prince docketed its judgment against Vandenberg and before Prince began garnishment proceedings.

¶ 11 On April 9, 2014, the Intervenors moved for reconsideration of the circuit court's November 6, 2012 order granting Prince's motion to compel payment. They argued: (1) the final land contract payment was not subject to garnishment; (2) the garnishable amount, if any, was limited to twenty-five percent of the final payment; and (3) Prince's garnishment action should be dismissed for failure to name all necessary and proper parties. The Intervenors also requested partition of the Brown County property.

¶ 12 After considering briefs filed by Prince, Van De Hey, and the Intervenors, the circuit court granted the Intervenors' motion to reconsider in a written decision and order filed on August 13, 2014. However, the court did not grant the Intervenors the relief they requested. The court explained reconsideration was warranted due to "changes in circumstances" since the November 6, 2012 order—specifically, the fact that the court was now aware the DOR had "perfected liens against Vandenberg's property pursuant to docketed delinquent tax warrants[.]" In light of this new information, the court stated it needed to reconsider "whether Prince [was] entitled to collect [any of the final land contract payment] through this garnishment action [.]" Relying on WIS. STAT. § 71.91(4),4 the court concluded the two tax warrants docketed on January 4, 2010 were superior to Prince's lien.

¶ 13 The court rejected the Intervenors' arguments that the final land contract payment was not subject to garnishment and that the garnishable amount, if any, was limited to one-fourth of the final payment. Accordingly, the court ordered Van De Hey to pay "the garnishable amount of $85,425" to the DOR. The court denied the Intervenors' request for partition, and it also concluded Van De Hey's claim for specific performance of the land contract was "premature" because the contract had not yet been breached.

DISCUSSION

¶ 14 On appeal, Prince and the Intervenors raise various arguments regarding the circuit court's August 13, 2014 order, all of which we reject. First, contrary to the Intervenors' assertion, we conclude the final land contract payment is subject to garnishment.

Second, we reject the Intervenors' argument that the garnishable amount, if any, is limited to...

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