HSBC Realty Credit Corp. v. City of Glendale

2007 WI 94, 735 N.W.2d 77, 303 Wis. 2d 1, 2007 Wisc. LEXIS 423
CourtWisconsin Supreme Court
DecidedJuly 11, 2007
Docket2005AP1042
StatusPublished
Cited by7 cases

This text of 2007 WI 94 (HSBC Realty Credit Corp. v. City of Glendale) is published on Counsel Stack Legal Research, covering Wisconsin Supreme Court primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
HSBC Realty Credit Corp. v. City of Glendale, 2007 WI 94, 735 N.W.2d 77, 303 Wis. 2d 1, 2007 Wisc. LEXIS 423 (Wis. 2007).

Opinions

DAVID T. PROSSER, J.

¶ 1. This is a review of a published decision of the court of appeals1 reversing an order of the Milwaukee County Circuit Court, Richard J. Sankovitz, Judge, that transferred the condemnation award in an eminent domain case from the control of the Milwaukee County Clerk of Court to a money market account at a private bank. The review requires us to interpret the interplay among three statutory provisions: Wis. Stat. §§ 59.40(3)(b), 59.40(3)(c), and 32.05(7)(d).2 We are also required to interpret Wis. Stat. § 814.61(12)(a)l. on a different issue.

[4]*4¶ 2. Wisconsin Stat. § 59.40(3)(b) grants a clerk of court (clerk) authority to invest "any funds" that are paid into the clerk's office and are being held for repayment, but it requires that the interest earned on these funds be paid into the county general fund. Wisconsin Stat. § 59.40(3)(c) allows a circuit court judge to direct that § 59.40(3)(b) not apply to "certain funds." The specific question we must decide is whether, after directing that § 59.40(3)(b) not apply to a condemnation award deposited with the clerk, a circuit judge has additional authority to transfer the award from the clerk's control into a private money market account so that it can earn interest for the benefit of the ultimate recipients of the award.

¶ 3. A third statute, Wis. Stat. § 32.05(7)(d), is relevant because it provides that "compensation" awards (i.e., condemnation awards) may "be deposited with the clerk of the circuit court. . . for the benefit of the persons named in the award."

¶ 4. We conclude that Wis. Stat. § 59.40(3)(c) empowers a circuit judge not only to veto the clerk's authority to invest "certain funds" and pay all interest on those funds into the county general fund, but also to direct the clerk to transfer "certain funds" from the clerk's control into a secure private account for the benefit of persons ultimately entitled to the funds. The judge's power under § 59.40(3)(c) is especially clear with respect to condemnation awards, when § 59.40(3)(c) is read in conjunction with Wis. Stat. § 32.05(7)(d). Nonetheless, the judge's power under Wis. Stat. § 59.40(3) (c) should be exercised with sound discretion, with the consent, if possible, of all affected parties, and with a prudence that assures that any funds transferred from the clerk's control be placed in "suitably protected accounts." We conclude that the circuit judge met these [5]*5standards in this case. In addition, we conclude that in this case the clerk was not entitled to a transfer fee under Wis. Stat. § 814.61(12)(a).3 Consequently, we reverse the decision of the court of appeals.

I. BACKGROUND FACTS AND PROCEDURAL HISTORY

¶ 5. The City of Glendale's Community Development Authority (CDA) embarked on a project to redevelop the Bayshore Mall. It condemned a parcel of commercial real estate containing a number of existing businesses. On December 10, 2004, the CDA deposited the condemnation award of $14,439,294.84 with Milwaukee County Clerk of Court John Barrett (Clerk Barrett) for the benefit of the "parties of interest" or "interested persons," pursuant to Wis. Stat. § 32.05(7)(d).4 The "interested persons" in these circumstances were HSBC Realty Credit Corporation; Bay-shore Town Center, LLC; Abercrombie & Fitch Stores, Inc.; Alterra Coffee Roasters; Athlete's Foot of Glen[6]*6dale; Barnes & Noble #2655; Blockbuster Entertainment; GNC Store #2956; Luxottica Retail Group; Mutual Savings Bank; Nautilus; North Shore Bank; Regis Corporation (Trade Secrets #7615); Gymboree Retail #433; Touchdown Inc. d/b/a Pro Image; Sears Roebuck & Company; Tumbleweed/Diamondback Management; Voicestream PCS II; and Walgreen Company #647.

¶ 6. The parties were notified of the deposit and were advised that a party entitled to all or part of the award could receive its proper share by filing a petition to distribute. The size of the award and how it was to be apportioned among the parties were both issues in dispute, but these issues are not before us in this appeal.

¶ 7. Upon deposit of the award, Clerk Barrett exercised his authority under Wis. Stat. § 59.40(3)(b) to invest the funds.5 He invested the award in Milwaukee County's general fund with the interest to go to the fund. The award would earn about 2 percent interest annually, producing about $24,000 a month for Milwaukee County.

¶ 8. On January 6, 2005, Bayshore Town Center, LLC (Bayshore) filed a motion with Judge Sankovitz, asking for an order to place the award into an interest bearing account for the benefit of the ultimate recipients of the award. Bayshore named a preferred depository. Bayshore estimated that the award would earn [7]*7between $400 and $800 of interest per day. Bayshore also sought an order prohibiting Clerk Barrett from collecting the fee under Wis. Stat. § 814.61(12)(a)l. for transferring the award to a private bank. None of the "interested persons" objected to Bayshore's motion, but Clerk Barrett successfully moved to intervene to challenge the motion.

¶ 9. On February 3, 2005, the circuit court granted Bayshore's motion and ordered that Clerk Barrett transfer the award from the county general fund into a separate money market account at the suggested private bank, with interest accruing to the benefit of the ultimate recipients of the award. The court also provided that neither the award nor the interest be released or disbursed without court order and that the transfer of the award not be subject to the fee in Wis. Stat. § 814.61(12)(a)l.

¶ 10. In an opinion supporting the order, the circuit court reasoned that it had discretion under Wis. Stat. § 59.40(3)(c) to decide whether the award could be transferred or should remain invested in the county's general fund.6 The circuit court weighed the value of the interest to the county against the impact upon the ultimate recipients of the award and decided that the amount of interest that would be diverted to the county would be "truly a windfall." The court observed that the county did not need to expend much effort to protect or manage the award and to the extent that the county had expended any effort, the county had "been more than handsomely compensated by the $24,000 or more [8]

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HSBC Realty Credit Corp. v. City of Glendale
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Bluebook (online)
2007 WI 94, 735 N.W.2d 77, 303 Wis. 2d 1, 2007 Wisc. LEXIS 423, Counsel Stack Legal Research, https://law.counselstack.com/opinion/hsbc-realty-credit-corp-v-city-of-glendale-wis-2007.