Westfair Corp. v. Kuelz

280 N.W.2d 364, 90 Wis. 2d 631, 1979 Wisc. App. LEXIS 2693
CourtCourt of Appeals of Wisconsin
DecidedMay 31, 1979
Docket78-534
StatusPublished
Cited by8 cases

This text of 280 N.W.2d 364 (Westfair Corp. v. Kuelz) is published on Counsel Stack Legal Research, covering Court of Appeals of Wisconsin primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Westfair Corp. v. Kuelz, 280 N.W.2d 364, 90 Wis. 2d 631, 1979 Wisc. App. LEXIS 2693 (Wis. Ct. App. 1979).

Opinion

MOSER, J.

This is an appeal from the judgment of the circuit court granted to intervenors, Garrett 0. McIntosh and Garrett W. McIntosh (McIntosh) against the plaintiff-appellant, Westfair Corporation (Westfair). The judgment orders Westfair to accept the amount of $55,791.33 as the proper amount of money to pay the equity of redemption for said premises, and in return to *634 deliver a warranty deed to McIntosh for real property located at 555 South 84th Street in the city and county of Milwaukee, Wisconsin.

On September 16, 1975, Westfair sold a land contract interest in the above premises to Russell L. Kuelz (Kuelz) and Paul L. Pearson. Pearson’s interest was subsequently transferred to Kuelz. On November 13, Kuelz hired Lemberg Electric Co., Inc. (Lemberg) to do electrical work on the car wash premises. On March 20, 1976, Lemberg completed its work and, on September 17, filed a mechanic’s lien claim against the property. On December 8, Lemberg commenced a lien foreclosure action against Kuelz.

On May 12, 1977, Kuelz defaulted on the Westfair land contract payments. On September 2, Lemberg obtained a default judgment of mechanic’s lien foreclosure which was entered in the county court of Milwaukee county providing for foreclosure of Kuelz’s ■ interest and authorizing a sheriff’s sale of Kuelz’s interest in the property.

On October 24, 1977, Westfair commenced an action for strict foreclosure of the land contract against Kuelz. On November 8, a lis pendens was filed in the Westfair foreclosure action.

On November 14, 1977, there was a sale on the Lem-berg foreclosure of mechanic’s lien. Lemberg purchased all of Kuelz’s interest at the foreclosure sale for $100. On November 16, Lemberg received a sheriff’s deed to the premises but did not file the sheriff’s deed until April 14,1978.

On February 7, 1978, Westfair filed its amended complaint in strict foreclosure of the land contract against Kuelz, Lemberg and others. On February 24, Lemberg answered Westfair’s complaint asking that its rights be adjudicated but made no demand that it be granted any equity of redemption. May 5th was the date of the default hearing on the Westfair strict foreclosure. At that *635 time Lemberg stipulated that its interest in the land is subordinate to that of Westfair. Findings of fact, conclusions of law, and a judgment of foreclosure were signed by Judge Barron on May 24, 1978.- The trial court granted an equity of redemption period alternatively for 45 to 60 days depending on the state of the ability of the parties to redeem.

Kuelz did not attend this proceeding; the only parties to attend were the attorney for Westfair and the attorney for Lemberg. Judgment was entered for strict foreclosure on May 30,1978.

When this period of redemption was given by the trial court, the only party interested in that redemption period was Lemberg. It is clear from the record that Lemberg wanted a 60-day redemption period in order to allow McIntosh sufficient time to finance the purchase of Lemberg’s interest in the land contract property, within the period of redemption. Westfair’s attorney, who was also present, knew of these negotiations.

On June 26, 1978, Lemberg assigned its interest to the Mclntoshes by a quit claim deed. The next day, the Mc-lntoshes tendered the balance due on the land contract to Westfair’s then attorney, James Clark. On July 25, Westfair rejected McIntosh’s tender.

There was a motion to intervene in this action by the Mclntoshes with a counterclaim for strict performance attached to said motion. On August 8, Westfair filed its reply and affirmative defenses. There is no formal order allowing the intervention but the trial court allowed intervention. A trial of the Mclntoshes’ counterclaim and the reply of Westfair was held on September 15, 1978, at which time the trial court granted judgment to McIntosh and filed a written memorandum decision September 18, 1978. An order for judgment was signed and filed September 29, 1978. Westfair appeals from the resultant judgment entered October 4, 1978.

*636 LAND CONTRACTS

Where a land contract is executed the vendee/pur-chaser (Kuelz here) becomes the owner of the land in equity, by equitable conversion, while the vendor/seller (Westfair here) retains legal title to secure the balance due on the purchase price. 1 When the purchaser defaults in his payments under the land contract, one of the remedies of the seller is strict foreclosure. This type of foreclosure is an equitable proceeding in which the seller affirms the land contract and offers to complete the terms of the agreement. Only when the purchaser fails to perform the full agreement by paying the balance due on the land contract within the time set by the court, are the purchaser’s rights thereunder foreclosed. 2 The period of redemption rests in the sound discretion of the trial court. 3

There is no question in this matter that Kuelz defaulted in the payment requirements of the land contract. There is no question Westfair was entitled to commence and obtain a judgment of strict foreclosure, as it did. There is no question that the trial court properly granted a short 45 to 60 day optional period of equity of redemption. The real question is who was granted that equity of.redemption period?

Westfair claims the equity of redemption was granted only to Kuelz, the land contract vendee/purchaser. The Mclntoshes claim that since Lemberg obtained a judgment of foreclosure on its mechanic’s lien claim and purchased Kuelz’s interest at the sheriff’s sale, that Lem-berg had sole claim to the equity or right of redemption. The Mclntoshes further claim Lemberg could assign that right of redemption to anyone and they did so by *637 quit claim deed to the Macintoshes, thereby enabling the Mclntoshes to pay the amount of redemption and receive the warranty deed from Westfair.

The record clearly reflects, without any possible doubt, that Westfair, Lemberg and the trial court treated Lem-berg as the party with the equity or right of redemption at the May 15, 1978, default proceeding in which West-fair and Lemberg were the only adversary participants. The sole issue at that proceeding was how long a period of redemption the trial court would grant. It is obvious from the record, when the equity of redemption period was argued between Westfair’s attorney and Lemberg’s attorney, that Lemberg was negotiating with the Mc-lntoshes to pay the balance due on the land contract as well as attorney’s fees and costs of the Westfair foreclosure. More important, however, is the fact that West-fair’s attorney was well aware of these negotiations and acquiesced in them, albeit he argued for a shorter redemption period.

We note again that strict foreclosure is an equitable proceeding and one of the maxim’s of equity is the doctrine of clean hands.

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Bluebook (online)
280 N.W.2d 364, 90 Wis. 2d 631, 1979 Wisc. App. LEXIS 2693, Counsel Stack Legal Research, https://law.counselstack.com/opinion/westfair-corp-v-kuelz-wisctapp-1979.