Moser v. Anchor Bank (WI)

Summary: In a foreclosure action, a trial court retains jurisdiction even after entering a final judgment of foreclosure because it is an order confirming the sale that finally resolves all the issues in the case.


Moser v. Anchor Bank FSB, No. 2012 AP 2700, 2013 WL 3064166 (Wis. Ct. App. 2013).


Facts: After Moser defaulted on a loan, Anchor Bank ("Anchor”) filed for foreclosure on Moser’s home and the circuit court subsequently entered a judgment of foreclosure in favor of Anchor. Before commencing the foreclosure action, Anchor had informed Moser of his eligibility for a federal loan modification program. After the circuit court entered the judgment of foreclosure, but six months before the scheduled sheriff’s sale, Anchor notified Moser about his incomplete documentation for the loan modification application. However, it was only one day before the scheduled sheriff’s sale that Moser brought necessary documents to Anchor for renewed consideration. Anchor refused. Moser filed a suit against Anchor, raising a number of contracts and torts claims and requesting money damages. The circuit court ruled that Moser’s claims were barred under the doctrine of claim preclusion and the common-law compulsory counterclaim rule. Moser appealed.


Holding: Affirmed. First, under the doctrine of claim preclusion, three elements have to be met, namely: (i) an identity between the parties or their privies in the prior and present suits, (ii) an identity between the causes of action in the two suits, and (iii) a final judgment on the merits in a court of competent jurisdiction. Moser alleged that the last two elements could not be met here because facts underlying his claims against the Bank arose (i) after the Bank’s foreclosure filing, or alternatively, (ii) after the judgment of foreclosure. The court of appeals found that both timings were still valid for purposes of claim preclusion because neither the foreclosure filing nor the judgment of foreclosure can be considered as a final judgment for purposes of claim preclusion in a foreclosure action. Since it is the confirmation of sale that determines the interests of parties, the loan modification program could progress even after the judgment of foreclosure and could still affect the judgment of foreclosure by discharging it retroactively. Second, the court of appeals noted that Wisconsin courts adopted the common-law compulsory counterclaim rule as an exception to the permissive counterclaim statute, Wis. Stat. Ann. § 802.07(1) (West 2008). Therefore, Moser’s claims could be barred if: (i) they could have been brought in the earlier action and (ii) a favorable ruling for Moser in the second suit would undermine the judgment in the first suit or impair the established legal rights of the Bank in the initial action. Rejecting Moser’s argument to the contrary, the court of appeals found that awarding money damages to Moser would necessarily reduce the amount that the Bank would obtain as a result of the judgment of foreclosure. For the foregoing reasons, the court of appeals upheld the circuit court’s decision dismissing Moser’s suit under the doctrine of claim preclusion and the common-law compulsory counterclaim rule.


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By: ATG Underwriting Department | Posted on: Mon, 05/19/2014 - 11:52am