COURT OF APPEALS
DATED AND FILED
March 15, 2011
Acting Clerk of Court of Appeals
This opinion is subject to
further editing. If published, the
official version will appear in the bound volume of the Official
A party may file with the
Supreme Court a petition to review an adverse decision by the Court of
Appeals. See Wis. Stat. § 808.10 and Rule 809.62.
STATE OF WISCONSIN
IN COURT OF
Wachovia Mortgage FSB p/k/a World Savings Bank,
Rogers, WE Energies f/k/a Wisconsin Electric
Power Co. and State of Wisconsin Department of Revenue,
from an order and a judgment of the circuit court for Milwaukee County: william sosnay,
Before Curley, P.J.,
Fine and Brennan, JJ.
¶1 FINE, J. Nora Dallas
appeals a judgment of foreclosure entered against her in connection with
property she owned with her brother Fredie Carl
Rogers. The judgment provided that Dallas:
“shall have absolutely no personal judgment against her as a result of
this foreclosure case.” Dallas also appeals the
circuit court’s order denying her motion for reconsideration. The circuit court decided this case on summary
judgment, and there are no disputed facts.
¶2 According to Dallas’s
affidavit on summary judgment, her mother “quit-claimed” to Dallas and Rogers a
house their mother owned. In 2003,
Rogers and Dallas got a mortgage loan from Fair Finance Corporation so Rogers could buy a
different house. As security for the
loan, Dallas and Rogers
executed a mortgage to Fair Finance on the house they got from their
mother. Dallas admits that she signed both the
mortgage and the mortgage note, and those documents bearing her signature are
in the Record.
¶3 Wachovia Mortgage, FSB, was formerly known as World Savings
Bank, FSB. In 2004, World Savings Bank
loaned money to Rogers. The loan was secured by a mortgage to World
Savings Bank on the property Rogers
owned with Dallas
that was subject to the Fair Finance mortgage. Proceeds from the World Savings Bank loan paid
off the Fair Finance loan and satisfied the Fair Finance mortgage. Rogers
signed the mortgage and the mortgage note; Dallas signed
¶4 Rogers defaulted on the World
Savings Bank loan, and Wachovia brought this action to foreclose on Dallas’s interest in the property
that had been mortgaged to Fair Finance.
Wachovia did not seek a deficiency judgment against Dallas.
As we have seen, the circuit court granted summary judgment to Wachovia,
and entered a judgment of foreclosure. Dallas
contends this was error because she did not sign either the World Savings Bank
mortgage note or the World Savings Bank mortgage.
¶5 A party is entitled to summary judgment
if “there is no genuine issue as to any material fact” and that party “is
entitled to a judgment as a matter of law.”
Wis. Stat. Rule
802.08(2). We review de novo a
circuit court’s ruling on summary judgment, and apply the governing standards, “just as
the trial court applied those standards.”
Green Spring Farms v. Kersten, 136 Wis. 2d 304, 315–317, 401 N.W.2d 816,
820–821 (1987). As noted, there are no
disputed material facts here. Rather, we
face a question of law: whether Wachovia
is entitled to foreclose on Dallas’s interest in the house
because the encumbrance on that interest was discharged by the World Savings
Bank loan. On our de novo review, we agree with the circuit court that, based on the
doctrine of equitable subrogation, it may.
¶6 “Subrogation is an equitable doctrine invoked to avoid unjust
enrichment, and may properly be applied whenever a person other than a mere
volunteer pays a debt which in equity and good conscience should be satisfied by another.” Rock
River Lumber Corp. v. Universal Mortgage Corp. of Wisconsin, 82
Wis. 2d 235,
240–241, 262 N.W.2d 114, 116 (1978).
Thus, “[e]quitable subrogation is a doctrine whereby one who has paid
off another’s mortgage obligation is treated as the owner of that obligation.” Countrywide Home Loans, Inc. v. Schmidt,
2007 WI App 243, ¶1, 306 Wis. 2d 200, 202, 742 N.W.2d 901, 902 (permitting
subsequent mortgagee to step into the shoes of an earlier mortgagee to the
extent that the subsequent mortgagee satisfied the earlier mortgage). Further, equitable subrogation does not
require that there be a contract between the parties. Rock River Lumber Corp., 82
Wis. 2d at
241–242, 262 N.W.2d at 117 (“The object of subrogation is ‘to do substantial
justice independent of form or contract relation between the parties.’”)
(quoted source and ellipses omitted). It
is thus immaterial that Dallas signed neither
the World Savings Bank mortgage note nor the World Savings Bank mortgage
because the loan was used to satisfy the Fair Finance mortgage, which Dallas executed and on
which she was liable, and because Wachovia,
as World Savings’s successor, does not seek any deficiency judgment against
¶7 World Savings Bank paid the debt for which Dallas was liable
(the mortgage note she signed in connection with the Fair Finance loan) and for
which she gave the mortgage to Fair Finance as security. World Savings Bank’s loan thus extinguished
the Fair Finance mortgage on Dallas’s interest in the property.
Had World Savings Bank not satisfied the Fair Finance mortgage, and had Rogers and Dallas defaulted on
the Fair Finance debt, Fair Finance would have been able to foreclose on Dallas’s
interest in the property. Wachovia steps
into Fair Finance’s shoes, and there is nothing unfair about this result. See Countrywide Home Loans, Inc., 2007
WI App 243, ¶14, 306 Wis. 2d at 208, 742 N.W.2d at 905 (The “equitable subrogation doctrine [is] one of ‘pure,
unmixed equity.’”) (quoted source omitted). Indeed, if Dallas were able
to retain her interest in the property she and Rogers
mortgaged as security for the Fair Finance loan despite the fact that the Fair
Finance mortgage was satisfied by the World Savings Bank loan, she would be
unjustly enriched at Wachovia’s expense.
Significantly, this is not a situation where a financial institution
seeks to extract from a person who cosigned only the original debt documents an
obligation that is more onerous than that to which the cosigner agreed.
¶8 We affirm the circuit court’s judgment of foreclosure and its
order denying Dallas’s
motion for reconsideration.
Additionally, there is no reason for us to address the other reasons
Wachovia argues in support of the circuit court judgment and order. See Gross
v. Hoffman, 227 Wis. 296, 300, 277
N.W. 663, 665 (1938) (only dispositive issues need be addressed); State
v. Blalock, 150 Wis. 2d
688, 703, 442 N.W.2d 514, 520 (Ct. App.
1989) (cases should be decided on the “narrowest possible ground”).
By the Court.—Judgment
and order affirmed.