Shuput v. Lauer, 81-550

• Decision Date: 02 November 1982
• Docket Number: No. 81-550,81-550
• Parties: George SHUPUT, Jr., Plaintiff-Respondent, v. John W. LAUER, Jr., June A. Lauer, Defendants-Appellants-Petitioners, Beryl R. Anderson, Defendant.
• Court: Wisconsin Supreme Court

Page 321

325 N.W.2d 321

109 Wis.2d 164

George SHUPUT, Jr., Plaintiff-Respondent, v. John W. LAUER, Jr., June A. Lauer, Defendants-Appellants-Petitioners, Beryl R. Anderson, Defendant.

No. 81-550.

Supreme Court of Wisconsin.

Submitted on Briefs Sept. 9, 1982.

Decided Nov. 2, 1982.

John W. Lauer, Jr., pro se.

James A. Guyette and Strnad & Gossens, S.C., Milwaukee, for plaintiff-respondent.

ABRAHAMSON, Justice.

This is a review of an unpublished order of the court of appeals filed September 22, 1981, summarily affirming an order of the Circuit Court for Waukesha County, John P. Buckley, Circuit Judge, denying the mortgagor's motions to deny confirmation of sale, to vacate the judgment of foreclosure and sale, to relieve the mortgagor from a stipulation, and to grant a new trial.

The principal issue presented for review is whether a mortgagor may challenge a judgment of foreclosure and sale on an appeal from an order confirming the foreclosure sale when the mortgagor fails to file a timely appeal from the judgment of foreclosure and sale. We conclude, as did the court of appeals, that the judgment of foreclosure and sale is not reviewable on an appeal from the order confirming the foreclosure sale. We further conclude that the order of the circuit court denying the mortgagor's motions to vacate the judgment of foreclosure and sale and to relieve the mortgagors from a stipulation entered into as a part of the foreclosure action should be affirmed as a proper exercise of discretion by the circuit court.

I.

The factual and procedural events leading to this court's review are complicated, but most of these events do not concern the issues raised in this review. We set forth only the facts relevant here.

The case arises from a transaction in which the Lauers executed an agreement to acquire a liquor business from Shuput. On January 17, 1980, Shuput initiated an action against the Lauers alleging that they had defaulted on the agreement by failing to make timely payments. On February 25, 1980, the Lauers and Shuput entered into a stipulation by which the Lauers acknowledged the default, established a new payment schedule, and agreed that a further default would accelerate the obligation to pay the remaining principal and accrued interest. The stipulation also provided that in the event of default, Shuput could enter both a judgment of foreclosure and sale of real estate which the Lauers had mortgaged to Shuput and a deficiency judgment against the Lauers for any remaining amount due to Shuput after the sale of the mortgaged premises. The stipulation permitted Shuput to elect to proceed under section 846.101 of the statutes for a six-month foreclosure without deficiency judgment and further provided that the Lauers waived misrepresentation claims and defenses they had raised in the foreclosure action and released Shuput from any claim thereon. In addition, the Lauers unequivocally acknowledged in the stipulation "that the amount owed to [Shuput] as set forth [in the stipulation] is a valid debt and they agree that they have no defenses or claims of offset against it, and furthermore that this Stipulation should stand as a complete release of any and all claims, offsets, defenses or counterclaims they have against [Shuput.]"

After the parties executed the stipulation in February 1980, the matter lay dormant until the summer of 1980 when Shuput again brought the matter before the circuit court. He asserted that the Lauers had not made payments due under the stipulated, revised payment schedule and that he was entitled to a judgment of foreclosure and sale of the mortgaged real estate. During these proceedings, the Lauers moved to have the stipulation set aside on the ground that Shuput had made various misrepresentations in the transactions relating to the Lauers' acquisition of the liquor business. The circuit court denied the Lauers' motion. A judgment of foreclosure and sale was entered on July 29, 1980; a notice of judgment was served on the Lauers on August 15, 1980. The Lauers did not appeal from the circuit court's judgment of foreclosure and sale or from the order denying their motion to set aside the stipulation.

Pursuant to the judgment of foreclosure and sale, a sheriff's sale of Lauers' real estate was held on February 23, 1981. Shuput purchased the real estate for $35,000, subject to a $34,750 first mortgage held by Mutual Savings. ¹ Shuput then moved the circuit court for an order confirming the sale. During the proceedings to confirm the sale the Lauers did not raise any issues relating to the sale itself but made motions seeking the following relief: an order denying confirmation of the sale, an order vacating the sale and the judgment of foreclosure and sale, an order relieving the Lauers from the stipulation, and an order granting a new trial.

The circuit court issued an order confirming the sale and denying the Lauers' motions. The Lauers appealed from the order. The court of appeals summarily affirmed the circuit court's order.

II.

The court of appeals held that while the Lauers could have attacked the underlying judgment of foreclosure and sale on a timely appeal from that judgment, on an appeal from an order confirming the sale, only issues respecting the sale itself can be raised.

The Lauers contend that they may contest the judgment of foreclosure and sale on an appeal from an order confirming the sale, reasoning as follows: (1) The judgment of foreclosure and sale entered on July 29, 1980, was an interlocutory judgment, that is, a nonfinal judgment made in the foreclosure action; (2) since a nonfinal judgment is not appealable as a matter of right, sec. 808.03(2), Stats.1979-80, the Lauers' failure to appeal from the judgment of foreclosure and sale does not preclude review of that judgment on an appeal from the final judgment or order; (3) the final order in this case is the order confirming the sale; (4) since a final order is appealable as a matter of right, sec. 808.03(1), Stats.1979-80, the Lauers' have a right to appeal from the order confirming the sale; (5) an appeal from a final order brings before the appellate court all prior nonfinal judgments, orders, and rulings adverse to the Lauers and favorable to Shuput made in the action or proceeding and not previously appealed and ruled upon, sec. 809.10(4), Stats.1979-80; (6) the Lauers' appeal from the order confirming the sale, a final order, brings before the appellate court the judgment of foreclosure and sale, a prior nonfinal judgment.

Shuput urges us to hold that the judgment of foreclosure and sale is a final order which is appealable as a matter of right and that because the Lauers did not timely appeal from that judgment the court of appeals is without jurisdiction to consider a challenge to the judgment of foreclosure and sale in an appeal from an order confirming the sale.

Before discussing the nature of the judgment of foreclosure and sale and the order confirming the sale, we review the distinction between final and nonfinal judgments. The statutes provide for appeals from final judgments and orders and from judgments and orders which are not final. A final judgment or order may be appealed to the court of appeals as a matter of right, sec. 808.03(1), Stats.1979-80, within the time specified in sec. 808.04, Stats.1979-80. Non-final judgments or orders, generally referred to as interlocutory judgments or intermediate orders, may be appealed to the court of appeals in advance of a final judgment only upon leave granted by the court. Sec. 808.03(2), Stats.1979-80. Interlocutory judgments and intermediate orders are not final judgments or orders appealable as a matter of right under sec. 808.03(1), Stats.1979-80.

A final judgment is defined in sec. 808.03(1), Stats.1979-80, as a judgment "which disposes of the entire matter in litigation as to one or more of the parties, whether rendered in an action or special proceeding." This statutory definition is explained by Robert Martineau and Richard Malgrem in Wisconsin Appellate Practice, sec. 402, p. 21 (1978), as a judgment which "terminates the litigation on the merits and leaves nothing to be done but to enforce by execution what has been determined. Asher v. Ruppa, 173 F.2d 10 (7th Cir. 1949)."

An interlocutory judgment is similar to a final judgment in that a decision on the merits has been made. Sec. 806.01(2), Stats.1979-80, describes an interlocutory judgment as a "finding substantially disposing of a claim on its merits but leaving an account to be taken or a condition to be performed in order fully to determine the rights of the parties." An interlocutory judgment is rendered rather than a final judgment because a factor necessary to the final judgment cannot be determined at trial. An intermediate order, unlike a final or interlocutory judgment, is not a determination of the action, sec. 806.01(1), but settles only ancillary matters.

According to this statutory scheme, the decision whether the judgment of foreclosure and sale or the order confirming the sale is appealable as a matter of right depends on whether the judgment or order disposes of the entire matter in litigation as to one or more of the parties.

By contending that the order confirming the sale is a final order and that the judgment of foreclosure and sale is not, the Lauers equate the modern foreclosure action with the actual sale of the mortgaged property. As Professor E. George Rudolph explains, this view of the foreclosure action is erroneous and is a result of misunderstanding the way foreclosure law has developed. Professor Rudolph describes the historical development of the foreclosure action and the difference between the judgment of foreclosure and the sale of the property as follows:

"Viewed historically the primary function of foreclosure is to terminte the mortgagor's interest in the mortgaged land. This was entirely clear under the early practice when strict...