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Republic Bank of Chicago v. Lichosyt (2007)

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Republic Bank of Chicago v. Lichosyt, 2007 WI App 150, 303 Wis. 2d 474, 736 N.W.2d 153 (Wis. Ct. App. 2007)

Legal information, not legal advice. Verify against the cited opinion.

  • Citation: Republic Bank of Chicago v. Lichosyt, 2007 WI App 150, 303 Wis. 2d 474, 736 N.W.2d 153 (Wis. Ct. App. 2007) (Appeal No. 2006AP1578 / Case No. 06-1578). Published opinion.
  • Court / Year: Wisconsin Court of Appeals, District IV, 2007 (published).
  • Topic tags: forfeiture · foreclosure · equitable_interest · remedies · strict-foreclosure · redemption · judgment-lien-priority
  • Facts: In February 2002, Jozef Lichosyt (vendee) entered a land contract with Julia Jakubow (vendor) to buy property in Wisconsin Dells, Sauk County, for a purchase price of **350,000 due at execution). The land contract was recorded in March 2002. In November 2004, Republic Bank of Chicago, holding a money judgment it had taken against Lichosyt in an Illinois proceeding, docketed that judgment in Sauk County and then brought an action seeking a judgment of foreclosure and sheriff’s sale of the property, asserting a judgment lien against Lichosyt’s equitable interest under the land contract. Vendor Jakubow separately pursued strict foreclosure of the land contract (the vendee being in default), and obtained a quitclaim deed from Lichosyt. The circuit court granted Jakubow summary judgment, foreclosing all of the Bank’s interests and vesting title in Jakubow without affording the Bank a redemption period. The Bank appealed.
  • Holding: The Court of Appeals affirmed for the vendor on every issue. It held: (1) the circuit court did not err in declining to dismiss the strict-foreclosure action because of the Bank’s competing foreclosure-and-sale action; (2) the court properly declined to dismiss based on the no-transfer order; (3) the vendee’s quitclaim deed to the vendor did not require dismissal of the strict-foreclosure action; (4) Wis. Stat. § 846.30 (the land-contract minimum-redemption-period statute) does not prevent a land-contract vendee from waiving the right of redemption in a strict foreclosure action; and (5) the circuit court correctly concluded it had no discretion to grant the Bank (a judgment lienholder) a redemption period in the vendor’s strict foreclosure action. In short: a creditor levying a judgment lien on the vendee’s equitable interest gets no redemption period in the vendor’s strict foreclosure, and the § 846.30 redemption right may be waived by those entitled to it.
  • Reasoning: A docketed money judgment attaches to the vendee’s equitable interest, but “a judgment lien … creates no estate, interest or right of property in the land”; it is merely a right to levy. A vendee’s equity of redemption (the chance to pay the balance and take title) is cut off by a judgment for strict foreclosure. Wisconsin case law does not accord the right of redemption in a strict-foreclosure action to a judgment lienholder — that right runs to the vendee (and others with a redemption interest), not to a creditor who merely docketed a judgment. As to § 846.30, the court read the statute’s minimum redemption period as enacted to stop courts from denying redemption to a vendee who wants it; nothing in the statute’s purpose or language requires a redemption period where all parties entitled to redeem waive it. The mandatory word “shall” sets a floor when redemption is exercised; it does not bar a holder of the redemption right from waiving it. Because the vendee had effectively relinquished his interest (including via the quitclaim deed) and no party with a redemption right asserted one, the court had no basis — and no discretion — to manufacture a redemption period for the Bank. A dissent criticized the result as inequitable relative to mortgage foreclosure (where junior creditors share in sale proceeds), since strict foreclosure can extinguish substantial vendee equity that might otherwise satisfy lienholders.
  • Practical impact for CFD operators/buyers: This is the leading Wisconsin authority on lien priority and redemption in land-contract strict foreclosure. For a vendor / operator, it confirms that strict foreclosure under Wisconsin practice can deliver clean, unencumbered title that cuts off a defaulting buyer’s equitable interest — and the judgment liens that have attached to it — without owing those junior creditors a redemption window or a share of any equity. A creditor who has merely docketed a judgment against the buyer cannot force the vendor into a mortgage-style judicial sale with proceeds-sharing. For a buyer, the case is a caution: once you default and your equity is foreclosed strictly, § 846.30’s redemption period can be waived, and creditors holding judgments against your equitable interest get no independent redemption right — the protection of redemption belongs to the vendee (and co-redemptioners) and can be given up. It situates Wisconsin’s land contract within a strict-foreclosure / statutory-redemption remedy regime (compare the treat-as-mortgage approach of skendzel-v-marshall-1973).
  • Good-law status: Good law. The decision is a published Wisconsin Court of Appeals opinion and is cited in the official Wisconsin Legislature statutory annotations to Wis. Stat. § 846.30 for the proposition that the redemption right may be waived. No reversal, overruling, or superseding statute was found on review of primary sources; it remains the controlling appellate authority on these points. (As the dissent flagged, the equities of strict foreclosure remain debated, but the holding stands.)
  • Source (retrieved):

▸ For Sellers / Operators — In Wisconsin, this case is your authority that a properly run strict foreclosure of a defaulted land contract can deliver clean title and extinguish judgment liens that creditors have docketed against the defaulting buyer’s equitable interest — without owing those creditors a redemption period or a cut of the equity. The § 846.30 minimum redemption period is a floor for those entitled to redeem and can be waived; a mere judgment lienholder is not among those with a redemption right. Run the foreclosure correctly and the remedy is powerful. (Note the dissent: the equities of cutting off substantial buyer equity remain contested, so document the default and process carefully.) See the wisconsin page and forfeiture-vs-foreclosure.

▸ For Buyers — If you default and the vendor strictly forecloses, your equitable interest — and the protection of the redemption period — can be lost: § 846.30 redemption can be waived, and creditors holding judgments against your interest get no separate redemption right. The right to redeem belongs to you; once you give it up or it is foreclosed, it is gone. Get advice before default, while equity and the redemption right still mean something.

Jurisdictions that follow / cite: wisconsin (controlling — land-contract strict foreclosure, redemption under Wis. Stat. § 846.30, and judgment-lien priority). Compare the treat-as-mortgage line in skendzel-v-marshall-1973; see the cross-jurisdiction remedy map in forfeiture-vs-foreclosure.

Disclaimer. Legal information, not legal advice. The result turns on Wisconsin’s strict-foreclosure procedure and the facts of each default; outcomes vary with the equities and the parties’ conduct. Confirm the opinion is still good law and consult a licensed Wisconsin attorney before relying on it.

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