United States General, Inc. v. Arndt

Decision Date04 August 1976
Docket NumberCiv. A. No. 75-C-204.
Citation417 F. Supp. 1300
PartiesUNITED STATES GENERAL, INC., a Wisconsin Corporation, Plaintiff, v. Ronald ARNDT et al., Defendants.
CourtU.S. District Court — Eastern District of Wisconsin

Robert K. Steuer, Milwaukee, Wis., for plaintiff.

Jerry D. McCormack, Antigo, Wis., for defendants Adamski & Combs.

Robert D. Repasky and Gary L. Carlson, Asst. Attys. Gen., Madison, Wis., for defendant Strandberg.

Richard T. Winter, Antigo, Wis., for remaining defendants.

Before FAIRCHILD, Circuit Judge, REYNOLDS, Chief District Judge, and WARREN, District Judge.

DECISION AND ORDER

REYNOLDS, Chief District Judge.

This action, brought pursuant to 42 U.S.C. §§ 1983, 1985 and 1988, involves a fourteenth amendment challenge to the validity of the Wisconsin Attachment Statute, Wis.Stats., Chap. 2661 (1973). The plaintiff,

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United States General, Inc. ("U. S. General") seeks damages as well as declaratory and injunctive relief. Jurisdiction is conferred on this court under the provisions of 28 U.S.C. § 1343.

This case is presently before the court on plaintiff's motion for declaratory and injunctive relief, and defendant Strandberg's motion to dismiss for lack of subject matter jurisdiction and/or failure of the complaint to state a claim on which relief can be granted. For the reasons given below plaintiff's motion must be granted and enforcement of the statute enjoined, while defendant's motion must be denied.

PARTIES AND FACTUAL BACKGROUND

The plaintiff is a Wisconsin corporation engaged in the business of real estate construction, with its principal place of business in Brookfield, Wisconsin. The defendant Ronald Arndt is a carpenter from Antigo, Wisconsin, who commenced one of the attachment proceedings against the plaintiff which gives rise to this action. The defendant Winona Arndt, presumably Ronald's wife, executed a bond with respect to this attachment proceeding. Defendants Oscar Thomae and Gerald Thomae are father and son and are engaged in the electrical business in Antigo. They also commenced an attachment action against the plaintiff, and their wives, defendants Orletta Thomae and Renae Thomae, each executed a bond in connection with this attachment action. The defendant Julius Wedemayer is a dry-wall applicator in Antigo, who commenced another attachment action against the plaintiff in which his wife, defendant Shirley Wedemayer, executed a supporting bond. The defendant Richard T. Winter is an attorney in Antigo and represented the above-mentioned defendants in their respective attachment actions. All these actions were commenced in the County Court of Langlade County, Wisconsin. The defendant Victoria Adamski is the clerk of court for Langlade County, and the defendant, Honorable Ralph J. Strandberg, is a county judge in Langlade County. Finally, the defendant, Roland Combs is the sheriff of Langlade County.

From a stipulation signed and filed by the parties, the following facts appear. At all times relevant to this suit, U. S. General owned three parcels of real estate which were located in Antigo, Wisconsin. In March of 1975, defendants Ronald Arndt, Oscar Thomae and Gerald Thomae, and Julius Wedemayer each commenced an action against U. S. General in the County Court for Langlade County in which each claimed that U. S. General owed money for work performed pursuant to a construction agreement on a housing project for the city of Antigo. The provisions of Sec. 266.02, Wis.Stats.,2 entitle any plaintiff to have a writ of attachment issue upon his request at any time after the summons and complaint are issued and shown to the clerk of court. Before the writ of attachment can be executed, however, the plaintiff or his representative must make and attach to the writ an affidavit showing the basis for the attachment under the provisions of Sec. 266.03, Wis.Stats., and a bond must be delivered in conformity with the provisions of Sec. 266.06, Wis.Stats. Each of the complainants in the state actions executed an affidavit stating that the underlying action was one for damages in excess of $500 which grew out of a contractual agreement, and that U. S. General owned real estate with the jurisdiction of the County Court "which it may attempt to dispose of upon service of the Summons and Complaint in this action with intent to defraud the plaintiff." (Statement of Uncontested Facts, Exhibits "A", "B" and "C".) Each complainant, as principal, and his wife as surety, also executed a bond in the amount of $250 which otherwise met the requirements of Sec. 266.06, Wis.Stats. The defendant Adamski thereupon determined in the case of each complainant that a summons had been issued and that a satisfactory affidavit and bond were attached. This determination was made ex parte and without notice to U. S. General. The defendant Adamski then issued three writs of attachment against U. S. General in the name of the defendant, Honorable Ralph J. Strandberg, presiding judge of the County Court of Langlade County, to whom the contract actions and attachment proceedings had been assigned. Defendant Combs, sheriff of Langlade County, executed the writs of attachment against the property of U. S. General under the provisions of Sec. 266.11, Wis.Stats., by filing a certificate of attachment in the office of the Register of Deeds of Langlade County. U. S. General first received notice of the attachment of its property when copies of the summons, complaint, writs of attachment, attachment affidavits, and bonds for attachment were served upon it approximately one week after the writs were executed. It is stipulated that each piece of property attached had a market value in excess of $1000.

Shortly after being served, attorneys for U. S. General commenced the present action in federal court and moved the Langlade County Court for an order staying all further proceedings in that court on the complaint and attachment pending a decision in this case. Judge Strandberg subsequently extended the time for U. S. General to answer or otherwise plead to the state court complaint, file a traverse to the attachment pursuant to Sec. 266.19, Wis.Stats., or apply for additional security pursuant to Sec. 266.07, Wis.Stats. No permanent stay was ordered. U. S. General thereupon filed an answer and counterclaim and moved to vacate and quash the attachment. That motion is still pending before the county court. This three-judge district court was convened pursuant to 28 U.S.C. §§ 2281, 2284, and the briefs and arguments of counsel on the motions presently before the court followed.3

STATUTORY SCHEME

In general, Chapter 266 of the Wisconsin Statutes provides a means whereby a plaintiff may attach the assets of a defendant at the inception of an action. Section 266.01 provides that "any creditor may attach the property of his debtor. * * *" The writ shall be issued and signed by the clerk of the state court in the name of the court and sealed with its seal at any time before final judgment after a summons has been issued and is shown to the clerk. Section 266.02. In the present case, the plaintiff or his attorney must make an affidavit to the effect that the defendant is indebted to the plaintiff in a sum greater than fifty dollars upon a contract, and that the affiant knows or has good reason to believe that "the defendant has disposed of or concealed or is about to dispose of or conceal his property or some part thereof with intent to defraud his creditors." Section 266.03(1)(b). Section 266.04 provides that this affidavit may be amended at any time before trial by a new affidavit. The plaintiff must post a bond of at least $250, executed by sufficient surety, to the effect that if the defendant shall recover judgment, the plaintiff shall pay all costs that may be awarded to the defendant and all damages which he may sustain by reason of the attachment. Section 266.06. If the defendant denies that the bond posted by the plaintiff is insufficient or the surety unsatisfactory, he may apply to a judge for additional security upon at least five days' notice to the plaintiff. Section 266.07. Within ten days of the receipt of plaintiff's bond, the sheriff shall file the summons, writ, affidavit and bond with the clerk of court, Section 266.08, and in the case of real property, the sheriff files with the register of deeds a copy of the writ with a certificate stating that "by virtue of the original writ he has attached all the interest of the named defendant in such real estate." Section 266.11. By posting a bond executed by two sureties in an amount double the sum alleged to be due, or double the value of the property attached, a defendant may release his attached property before judgment. If the attached property is real estate, this bond may be "a sum fixed by the court or a judge, on notice." Section 266.16. Section 266.18 provides that a writ of attachment may be modified or vacated at any time prior to trial "upon five days' notice of motion." A defendant may also file a traverse to the attachment action in which any material fact set forth in the attachment affidavit, except the alleged liability and the amount thereof may be denied. The questions joined shall be tried by the court before trial of the underlying action, with the burden of proof placed on the plaintiff. Section 266.19. The party prevailing on the issues raised by the traverse shall receive, either through the ultimate judgment or by way of set-off, his costs arising out of the traverse. Section 266.20. If the defendant ultimately prevails in the underlying action, or if the action is discontinued, he shall be awarded his damages resulting from the detention or sale of the property attached. Section 266.21.

NONINTERVENTION

We are initially faced with the question of whether applicable considerations of comity and federalism require this Court to stay its hand in the present case....

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