Lis
pendens must be maintained during appeal
By
David Ziemer
Wisconsin Law Journal
August
11, 2004
 |
| "Discharging
the lis pendens before the expiration or exhaustion of the appellate process defeats
both the notice and preservation objectives." Hon.
Michael W. Hoover
Wisconsin Court of Appeals
|
A
lis pendens must be maintained while appellate proceedings are still pending,
the Wisconsin Court of Appeals held on Aug. 3.
Mark
W. Zweber filed a complaint against Melar Ltd., Inc., in May 2003, seeking, among
other things, specific performance of a contract to purchase real estate.
Zweber
recorded a lis pendens with the Barron County Register of Deeds pursuant to sec.
840.10(1), and Melar counterclaimed for slander of title.
In
January 2004, Barron County Circuit Court Judge Edward R. Brunner granted summary
judgment to Melar, dismissing Zweber's complaint. It also denied Zweber's motion
for summary judgment on Melar's counterclaim, and specifically noted the slander
of title action was still pending.
The
court directed Melar to prepare an order reflecting those determinations, which
Melar did, but the proposed order that Melar prepared also discharged the lis
pendens. The court signed the order.
At
Zweber's request, the court held a telephone conference regarding the lis pendens
order, staying it pending further argument. The court noted that Zweber could
not appeal the order as a matter of right since the counterclaim was pending,
but rejected Zweber's argument that the lis pendens should remain in place until
all avenues of appeal were exhausted.
Zweber
filed a petition for leave to appeal, which the court of appeals granted, as well
as a stay of the order discharging the lis pendens. The court of appeals reversed
the lower court's discharge of the lis pendens, in a decision by Judge Michael
W. Hoover.
After
a brief review of the history of lis pendens in its common law and statutory forms,
and noting the purposes of the lis pendens statute — protecting the finality
of judgments by preserving the status quo of the property and providing notice
to third parties of pending litigation — the court set forth the relevant
statutes.
| What
the court held Case:
Mark R. Zweber v. Melar Ltd., Inc., No. 04-0538. Issue:
Does a lis pendens remain in effect pending appeal? Holding:
Yes. Discharge of the lis pendens pending appeal would undermine the purposes
of providing notice to third parties and preserving the status quo. Counsel:
JJoseph S. Lawder, Minneapolis, MN; Eric J. Magnuson, Minneapolis, MN, for appellant;
Joe Thrasher, Rice Lake, for respondent. |
The
lis pendens statute, sec. 840.10 provides, in relevant part:
(1)(a)
In an action where relief is demanded affecting described real property which
relief might confirm or change interests in the real property, after the filing
of the complaint the plaintiff shall present for filing or recording in the office
of the register of deeds of each county where any part thereof is situated, a
lis pendens .... From the time of filing or recording every purchaser or encumbrancer
whose conveyance or encumbrance is not recorded or filed shall be deemed a subsequent
purchaser or encumbrancer and shall be bound by the proceedings in the action
to the same extent and in the same manner as if the purchaser or encumbrancer
were a party thereto ....
(3)
The lis pendens may be discharged upon the condition and in the manner provided
by s. 811.22 for discharging an attachment or by s. 806.19(1)(a) for satisfying
a judgment."
Section
811.22 provides, "When the defendant recovers judgment ... subject to the
plaintiffs rights on appeal, and he or she may maintain an action [for damages
from the attachment] .... Upon the entry of final judgment in favor of the defendant
or on satisfaction of a plaintiff's judgment, the clerk of court shall, if real
estate was attached, certify the fact of the judgment or satisfaction, and on
recording the certificate with the register of deeds in any county in which attached
lands are situated the register shall enter the certificate upon the records of
his or her office in discharge of the attachments (emphasis added)."
Section
806.19 provides, "(1)(a) A judgment may be satisfied in whole or in part
... by an instrument signed and acknowledged by the owner ... signed and entered
on the judgment and lien docket in the county where first entered."
The court
concluded, "An attachment is released under Wis. Stat. sec. 811.22 when either
(1) the defendant finally prevails against the plaintiff and the claims used to
obtain the attachment are extinguished, or (2) the plaintiff prevails and the
defendant satisfies the judgment so that the attachment is no longer needed to
ensure payment. However, the defendant's final judgment is subject to the plaintiff's
rights on appeal, and the plaintiff's judgment usually remains unsatisfied until
after the appellate process is complete — would be unusual for a defendant
to satisfy the judgment and then appeal it. For the same reason, Wis. Stat. sec.
806.19(1)(a) — the satisfaction of judgment statute — implicitly relies
on exhaustion or expiration of the appeals period because a defendant has no reason
to satisfy a judgment he or she anticipates will be overturned on appeal."
The
court reasoned, "In any given action, the parties would naturally be bound
by the results of appellate proceedings. Since purchasers are to be bound as if
they were parties, they too must be bound by appellate proceedings. Thus, discharging
the lis pendens before the expiration or exhaustion of the appellate process defeats
both the notice and preservation objectives."
Accordingly,
the court reversed the discharge of the lis pendens.
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David
Ziemer can be reached by email.
