COURT OF APPEALS
DATED AND FILED
December 17, 2009
David R. Schanker
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 Reports.
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 APPEALS
Federal National Mortgage Association,
Scott T. Lewis and April D. Lewis,
First Midwest Bank,
Illinois Process Servers, Inc. and ABC Insurance Company,
Daniel L. Parise and Helen M. Parise,
from a judgment of the circuit court for
Before Vergeront, Lundsten and Storck, JJ.
¶1 PER CURIAM. Appellants Daniel Parise
and Helen Parise purchased a home after a foreclosure sale. They appeal the circuit court’s order
establishing the right of First Midwest Bank (
¶2 This case started as a simple foreclosure action. Federal, as the first mortgage holder,
commenced this foreclosure action in March of 2003. The foreclosure summons and complaint named
owners of the residence and a second mortgage holder,
¶3 In May of 2003, Federal was granted by default a
non-deficiency foreclosure judgment with a six-month redemption period. In November of 2003, the property was sold at
sheriff’s sale to Federal for $206,236.82, the amount of its judgment. The sheriff’s sale was confirmed, and a
sheriff’s deed was given to Federal.
Federal listed the home with a realtor and, on May 11, 2004, the
¶4 About eight months later,
¶5 On November 5, 2007, about four years after the sheriff’s
sale and about three and a half years after the purchase by the
¶6 The circuit court held that
¶7 The circuit court also concluded that, if Midwest opted to
“redeem” the property, the
¶8 Finally, if Midwest opted to redeem, the circuit court
established for the Parises an “ultimate equity of redemption,” that is, an
amount the Parises could pay to Midwest to retain their property. The amount was set at $301,224.89 and was
comprised of the amount the court determined Midwest would have paid to
purchase the property, $206,236.82,
and the amount of
¶9 Under the court’s ruling,
¶10 In fashioning equitable relief for Midwest, the circuit court relied on Buchner v. Gether Trust, 241 Wis. 148, 5 N.W.2d 806 (1942). We agree that Buchner provides the framework for a resolution of this case, but we conclude that the circuit court erroneously exercised its discretion in applying Buchner to the facts of this case.
¶11 A court of equity has the power to fashion a remedy to meet the
needs of a particular case. See Prince v. Bryant, 87
¶12 The Parises contend that the circuit court failed to fashion an
appropriate equitable remedy because, if Midwest elects to “redeem,” the
¶13 Although we do not agree with all of the particulars of the
Parises’ arguments, we do agree that the relief ordered by the circuit court
must be vacated because it inequitably harms the
¶14 In Buchner, the plaintiffs purchased property as
a result of a mortgage foreclosure proceeding.
A junior judgment lienholder, Gether Trust, was named as a party in the
mortgage foreclosure, but was not served.
[W]here a senior mortgage has been foreclosed without making the claimant of a subordinate lien a party, the proceedings are not null and void but leave the holder of the subordinate lien with the same rights that he would have had, had he been made party to the foreclosure proceedings. This implies that his rights are not improved, or the rank of his judgment lien advanced. The rights of the subordinate lien claimant duly served with process in the foreclosure of a senior mortgage are to pay the mortgage or to redeem the property. These rights are unimpaired and unchanged by the defective foreclosure.... [T]he junior lien claimant may bring an action to redeem provided he does not lose his rights by laches.... [W]e discover no case holding that the rights of the junior claimant are improved or increased by the defect in the foreclosure proceedings. In accordance with quite elementary principles of justice, his position is preserved and equity will not permit that he suffer any disadvantage from the failure to include him as a party. [At the same time, it] would be utterly unfair to do more than this.
Changes in the form of remedies do not affect substantive rights. It does not matter what label is put upon the attempt, whether by the purchaser at foreclosure sale or the holder of a junior lien, to arouse the conscience of a court of equity. Under the code, the facts are stated, and if in a substantive sense equitable rights are disclosed the court will give such remedies as are appropriate to those rights.
¶15 Before moving on, we note that we will assume, without
deciding, that the law requires that the property be offered to
¶16 We begin our analysis of the facts with a discussion of the
value of the property at the time of the sheriff’s sale. This amount is important because, if it was
no more than the outstanding first mortgage, then there would have been insufficient
equity in the property to cover any of the second mortgage held by
¶17 First, at the sheriff’s sale, a sale that by law must be advertised, no one offered to pay more than the first mortgage amount.
¶18 Second, when later put up for sale with a realty firm, the
property sold for substantially less than the first mortgage amount. There was a stipulation at the time of trial
that: “After obtaining an appraisal on
the property on May 11th, 2004, the
¶19 Third, none of the parties, including Midwest, presented
evidence indicating that the property was worth more than the first mortgage amount
at the time of the sheriff’s sale. Cases
such as Buchner put
¶20 We conclude that the only reasonable inference from the record
is that the value of the property at the time of the sheriff’s sale was no more
than the amount of the first mortgage.
It follows that there is no reason to believe that
¶21 It is true that
¶22 The remedy also fails to treat the
¶23 In light of the circumstances, especially the fact that Midwest
was not harmed by lack of notice, we conclude that the only reasonable remedy
that gives Midwest back its lost opportunity is to permit Midwest to acquire
the property at its current fair market value.
We acknowledge that the
¶24 Accordingly, on remand, if Midwest remains interested in
exercising its right to purchase the property, the circuit court should hold an
evidentiary hearing to determine the current fair market value of the property
and then permit Midwest to acquire the property by paying that amount to the
¶25 As noted above, the
¶26 For the above reasons, we remand to the circuit court for further proceedings consistent with this opinion.
By the Court.—Judgment reversed and cause remanded for further proceedings.
This opinion will not be published. See Wis. Stat. Rule 809.23(1)(b)5.
 Circuit Court Judge John R. Storck is sitting by special assignment pursuant to the Judicial Exchange Program.
 In setting the amount Midwest would have to pay to
purchase the property, the court wrote that
 Wis. Stat. § 846.16(1) (2007-08). All further references to the Wisconsin Statutes are to the 2007-08 version unless otherwise noted.
 In addition to the right to
purchase the property, a junior lienholder properly served in the proceeding to
foreclose the senior mortgage also has the right to pay the senior mortgage and
become subrogated to the rights of the senior mortgagee. Buchner v. Gether Trust, 241
observe that, if Midwest opts to “redeem” the property, the order permits the