Anderson v. Anderson Tooling, Inc.

961 N.W.2d 911

2021 WI App 39

Jeffery D. ANDERSON and Lori J. Anderson, Plaintiffs-Respondents,

v.ANDERSON TOOLING, INC., Defendant-Appellant.

Appeal No. 2020AP898

Court of Appeals of Wisconsin.

Opinion Filed: May 6, 2021

Submitted on Briefs: October 16, 2020

On behalf of the defendant-appellant, the cause was submitted on the briefs of Christopher Stroebel of Stroebel Law, LLC, Madison.

On behalf of the plaintiffs-respondents, the cause was submitted on the brief of Kristen K. Beilke of Murphy Desmond S.C., Madison.

Before Fitzpatrick, P.J., Blanchard, and Nashold, JJ.

BLANCHARD, J.

¶1 This is a dispute between a judgment creditor, Anderson Tooling, Inc. ("ATI"), and married judgment debtors, Jeffery and Lori Anderson, regarding statutory homestead exemptions claimed by the debtors. The Andersons each claim an exemption as protection from a judgment lien that would otherwise attach to the Andersons’ residential property in Dodge County. See WIS. STAT. §§ 806.15(1) (addressing judgment liens), 815.20(1) (addressing homestead exemptions) (2019-20).¹ In 2015, ATI entered a money judgment against the Andersons, from an Iowa state court, in the judgment and lien docket for Dodge County. In 2019, the Andersons sued ATI in Dodge County Circuit Court, seeking a declaratory judgment that the Andersons’ property was their homestead and that this entitled them to execute a recordable release from the judgment lien under § 815.20(2). The circuit court granted summary judgment to the Andersons. ATI appeals.

¶2 There is no dispute that the Andersons’ Dodge County property was their homestead when ATI entered the Iowa judgment on the Dodge County docket, and that this exempted the Andersons’ equity interests in the residential property from a judgment lien as of that moment in time. See WIS. STAT. § 815.20(1). ATI alleges, however, that in 2019 the Andersons ceased to occupy this property as their homestead. Based on this allegation of fact, ATI argues that the Andersons invalidated (in statutory terms, it "impaired") the exemptions. See § 815.20(1).

¶3 We assume without deciding that the following premise advanced by ATI is an accurate statement of law: when a Wisconsin homestead exemption is valid as of the time when a judgment is entered on the judgment and lien docket, the exemption can then become "impaired" because the judgment debtors abandon the homestead, allowing the docketed judgment to become a lien attaching to the residential property at issue. Having made that assumption about the law, we conclude that summary judgment in the Andersons’ favor was appropriate because there is no genuine issue of fact that could be resolved to show that the Andersons impaired their exemptions through abandonment of the homestead after docketing.

BACKGROUND

¶4 At all pertinent times, Jeffery and Lori Anderson have been married. Both Andersons were employed by ATI, which is based in Fairfield, Iowa. Lori's ATI job ended in 2008, and Jeffery's in 2011. Until after Jeffery stopped working for ATI, the Andersons resided in Fairfield. A number of the Andersons’ extended family members also lived in Fairfield.

¶5 After Jeffery no longer worked at ATI, ATI and the Andersons became involved on opposite sides of extensive litigation in Iowa state court. See Anderson v. Anderson Tooling, Inc. , 928 N.W.2d 821, 823-26 (Iowa 2019). Neither side develops any argument in this appeal related to the merits of any issue in the Iowa litigation. All that matters here is the existence of a money judgment in ATI's favor against the Andersons that resulted from the Iowa litigation.

¶6 While the Iowa litigation was pending, in 2012, the Andersons sold their residential property in Iowa and moved to Wisconsin. In 2014, they purchased the residential property in Dodge County that is the subject of the contested homestead exemptions in this case.

¶7 A trial in 2015 resulted in the judgment in ATI's favor, which was upheld on appeal.. See id. at 825-26 (affirming trial court's post-verdict decision to extend ATI's judgment to include both Jeffery and Lori). ATI had the amended judgment entered in the judgment and lien docket for Dodge County in December 2015.

¶8 We interrupt the background chronology to briefly summarize Wisconsin law addressing homestead exemptions. Under WIS. STAT. § 990.01(14), an "exempt homestead" is a person's "dwelling ... and so much of the land surrounding it as is reasonably necessary for its use as a home." See § 990.01(intro), (defining "exempt homestead" for the "construction of Wisconsin laws"). There is no dispute that at all pertinent times here the Wisconsin property met the definition of a homestead in § 990.01(14).

¶9 WISCONSIN STAT. § 815.20(1) provides in part that "[a]n exempt homestead ... selected by a resident owner and occupied by him or her shall be exempt ... from the lien of every judgment."² See also WIS. STAT. § 806.15(1) (providing in part that "[e]very judgment properly entered in the judgment and lien docket ... shall ... be a lien on all real property of every person against whom the judgment is entered which is in the county where the judgment is rendered, except homestead property that is exempt from execution under s. 815.20 , and which the person has at the time of the entry or which the person acquires thereafter within the 10-year period." (emphasis added)). Further, there is a cap on the amount of the exemption: "each spouse may claim a homestead exemption of not more than $75,000." Sec. 815.20(1).

¶10 The function of a homestead exemption is to protect the judgment debtor's equity in the homestead. See Rumage v. Gullberg , 2000 WI 53, ¶27, 235 Wis.2d 279, 611 N.W.2d 458, amended on denial of reconsideration , 2000 WI 112, 238 Wis. 2d 844, 617 N.W.2d 849. A judgment lien attaches to any equity of the debtor that exceeds the exemption cap, creating a situation in which a homestead is merely "partially exempt" from the lien, given the amount of the lien. See id., ¶27. However, there is no dispute here that the Andersons’ equity in the Wisconsin property would be "fully exempt" if the exemptions apply. See id., ¶28.

¶11 Returning to the chronology, in January 2019, Jeffery accepted full-time employment with a Fairfield, Iowa company (not ATI) owned by a son of the Andersons. The drive between Fairfield and the Andersons’ Wisconsin property is about five hours. Lori had already been employed part-time by the same company. It is undisputed that Jeffery's job generally required that, on work days, he be physically present in the Fairfield area, while Lori primarily worked remotely from the Wisconsin property.

¶12 As we describe in more detail below, it is undisputed that the Andersons planned to eventually make a permanent move from Dodge County to Fairfield. More specifically, there is no dispute that, from at least January through November 2019 and while each of them (particularly Jeffery) spent significant periods of time in Fairfield, they took steps toward accomplishing this planned move. This included making arrangements with relatives in Fairfield for housing that could become their permanent residence. In April 2019, these relatives purchased a residential property in Fairfield ("the Iowa property"), based on the Andersons’ interest in moving to Iowa. The Andersons paid rent on the Iowa property and expressed interest in eventually purchasing it.

¶13 The Andersons listed their Wisconsin property for sale on May 22, 2019, and accepted an offer to purchase on the same day. However, as far as the evidence submitted on summary judgment shows, the sale did not close and the Andersons continued to own the Wisconsin property.

¶14 In June 2019, the Andersons filed this lawsuit against ATI. The Andersons sought a declaratory judgment that they could claim the Wisconsin property as their homestead for exemption purposes and therefore the Andersons were entitled to the execution of a recordable release from ATI's judgment lien as provided in WIS. STAT. § 815.20(2).

¶15 The Andersons moved for summary judgment. They argued that the Wisconsin property was their homestead as of the moment when ATI docketed its judgment, and that this moment is the only relevant time period when determining if the exemptions would prevent ATI's judgment from attaching a judgment lien to the property.

¶16 ATI countered based on the premise that an exemption that is valid at the time of judgment docketing can become "impaired" when the judgment debtor later abandons the homestead. See WIS. STAT. § 815.20(1) (carving out two circumstances in which "the homestead exemption is not impaired" despite a lack of occupancy by the owner for some identified period of time). Based on that premise, ATI argued that there was a genuine dispute, suitable for trial, as to whether the Andersons had impaired their exemptions by abandoning the Wisconsin homestead during the following time frame: after Jeffery began Iowa-based employment in January 2019, but before the Andersons listed the Wisconsin property for sale in May 2019 and accepted an offer.

¶17 The circuit court agreed with the Andersons that the only time period relevant to the determination of whether a property is exempt from a lien of judgment is the moment of the judgment's docketing, and therefore any activities of the Andersons after the moment of docketing in 2015 must be ignored. The court noted that there was no evidence that the Andersons had abandoned their homestead before ATI docketed its judgment in Dodge County, and ATI has never contested this point.

¶18 In the alternative, the circuit court concluded that, even if the Andersons could have impaired their exemptions after the docketing, summary judgment in their favor was still appropriate. This ruling was based on a feature of WIS. STAT. § 815.20(1), which we explain below. This feature carves out a circumstance in which an "exemption is not impaired," despite the fact that the judgment debtor is not occupying the property at issue,...