By: Derek Hawkins//January 17, 2017//
WI Court of Appeals – District III
Case Name: Nationstar Mortgage, LLC v. Robert R. Stafsholt
Case No.: 2015AP1586
Officials: Stark, P.J., Hruz and Seidl, JJ
Focus: Foreclosure
Nationstar Mortgage LLC, n/k/a Bank of America, NA, appeals orders that: dismissed its foreclosure action against Robert Stafsholt and others; reinstated the underlying mortgage with a principal balance of $172,108.17; and permitted a $24,406.89 offset against that balance to account for attorney fees Stafsholt incurred in the foreclosure proceedings. Nationstar argues the circuit court erred by: (1) concluding Bank of America (BOA), one of Nationstar’s predecessors in interest, breached the implied covenant of good faith and fair dealing; (2) concluding Stafsholt prevailed on his equitable estoppel affirmative defense; (3) granting Stafsholt declaratory judgment on his breach of contract claim; (4) granting Stafsholt an offset against the mortgage’s principal balance for his attorney fees and costs; and (5) prohibiting Nationstar from collecting certain fees and interest.
In a cross-appeal, Stafsholt argues the circuit court erroneously exercised its discretion by reducing his requested attorney fees and costs to account for $40,239.92 in interest the court had already determined Nationstar could not collect from him. Stafsholt also argues the award of attorney fees and costs should be amended to account for additional fees and costs he has incurred in the circuit court and on appeal. Finally, Stafsholt argues in the alternative that, pursuant to WIS. STAT. § 802.05(3)(a)2., Nationstar should be ordered to show cause as to why Stafsholt is not entitled to recover his attorney fees and costs as a sanction for the wrongful conduct of Nationstar’s predecessors in interest.
We conclude the circuit court properly determined that BOA breached the implied covenant of good faith and fair dealing, that Stafsholt prevailed on his equitable estoppel affirmative defense, and that Stafsholt was entitled to declaratory judgment on his breach of contract claim. We also conclude the court properly determined Nationstar was prohibited from collecting certain fees that were charged to Stafsholt as a result of his default. We therefore affirm with respect to those issues. However, we conclude the court erred by awarding Stafsholt attorney fees and costs, and we reverse on that basis. For the reasons explained below, we also reverse those portions of the court’s orders regarding Nationstar’s ability to recover interest, and we remand for further proceedings on that issue