The Trusted Adviser October 2009 | Volume 2 - Number 8

ATTORNEYS | Practice Notes




Kowske v Ameriquest Mortgage Co, 2008 AP 496 (Wisc Ct App, 2009).

Facts:In 2004, Ameriquest brought a foreclosure action against Kowske. Kowske neither appeared nor defended the foreclosure action, and a default judgment was granted for Ameriquest. Following the default judgment, Kowske paid the balance of the mortgage, and the foreclosure judgment was vacated and the case dismissed.

In 2006, Kowske sued Ameriquest, alleging that it made misrepresentations in 2003 and that it engaged in unfair trade practices. Ameriquest argued that Kowske's claims in the second suit were not actionable because he failed to raise them in the foreclosure action. Because he was aware of them when Ameriquest brought the foreclosure action in 2004 and was seeking damages related to the same action, they were compulsory counterclaims.

Kowske argued that because the judgment had been vacated and dismissed, it could not be undermined by a subsequent action. Also, he argued that, if claim preclusion were applied here, Ameriquest would be unjustly rewarded because Kowske was unable to reopen the default judgment of foreclosure. He relied on A.B.C.G. Enterprises, Inc. v First Bank Southwest, 184 Wis 2d 465, 515 NW2d 904 (Wis., 1994). A.B.C.G. Enterprises established that where a second action, if successful, "would nullify the prior foreclosure action or impair rights established in the initial action," the second action is precluded. Id. at 482. Kowske also argued that because the case was dismissed, there was no final judgment on the merits, one of the essential elements of claim preclusion . The court found in favor of Ameriquest, and Kowske appealed.

Holding:Affirmed. The court of appeals held that the dismissal of the foreclosure action was a final judgment on the merits because it was based on a successful foreclosure action and subsequent mortgage payment. Thus, all of the elements of claim preclusion under Menard were satisfied, and Kowske was barred from bringing a second suit.






THE TRUSTED ADVISER is published by Attorneys’ Title Guaranty Fund, Inc., P.O. Box 9136, Champaign, IL 61826-9136. Inquiries may be made directly to Mary Beth McCarthy, Corporate Communications Manager. ATG®, ATG® plus logo, are marks of Attorneys’ Title Guaranty Fund, Inc. and are registered in the U.S. Patent and Trademark Office. The contents of the The Trusted Adviser © Attorneys' Title Guaranty Fund, Inc.

[Last update: 9-29-09]