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Lis pendens must be maintained during appeal

By: dmc-admin//August 11, 2004//

Lis pendens must be maintained during appeal

By: dmc-admin//August 11, 2004//

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Hoover

"Discharging the lis pendens before the expiration or exhaustion of the appellate process defeats both the notice and preservation objectives."

Hon. Michael W. Hoover
Wisconsin Court of Appeals

A lis pendens must be maintained while appellate proceedings are still pending, the Wisconsin Court of Appeals held on Aug. 3.

Mark W. Zweber filed a complaint against Melar Ltd., Inc., in May 2003, seeking, among other things, specific performance of a contract to purchase real estate.

Zweber recorded a lis pendens with the Barron County Register of Deeds pursuant to sec. 840.10(1), and Melar counterclaimed for slander of title.

In January 2004, Barron County Circuit Court Judge Edward R. Brunner granted summary judgment to Melar, dismissing Zweber’s complaint. It also denied Zweber’s motion for summary judgment on Melar’s counterclaim, and specifically noted the slander of title action was still pending.

The court directed Melar to prepare an order reflecting those determinations, which Melar did, but the proposed order that Melar prepared also discharged the lis pendens. The court signed the order.

At Zweber’s request, the court held a telephone conference regarding the lis pendens order, staying it pending further argument. The court noted that Zweber could not appeal the order as a matter of right since the counterclaim was pending, but rejected Zweber’s argument that the lis pendens should remain in place until all avenues of appeal were exhausted.

Zweber filed a petition for leave to appeal, which the court of appeals granted, as well as a stay of the order discharging the lis pendens. The court of appeals reversed the lower court’s discharge of the lis pendens, in a decision by Judge Michael W. Hoover.

After a brief review of the history of lis pendens in its common law and statutory forms, and noting the purposes of the lis pendens statute — protecting the finality of judgments by preserving the status quo of the property and providing notice to third parties of pending litigation — the court set forth the relevant statutes.

What the court held

Case: Mark R. Zweber v. Melar Ltd., Inc., No. 04-0538.

Issue: Does a lis pendens remain in effect pending appeal?

Holding: Yes. Discharge of the lis pendens pending appeal would undermine the purposes of providing notice to third parties and preserving the status quo.

Counsel: JJoseph S. Lawder, Minneapolis, MN; Eric J. Magnuson, Minneapolis, MN, for appellant; Joe Thrasher, Rice Lake, for respondent.

The lis pendens statute, sec. 840.10 provides, in relevant part:

(1)(a) In an action where relief is demanded affecting described real property which relief might confirm or change interests in the real property, after the filing of the complaint the plaintiff shall present for filing or recording in the office of the register of deeds of each county where any part thereof is situated, a lis pendens …. From the time of filing or recording every purchaser or encumbrancer whose conveyance or encumbrance is not recorded or filed shall be deemed a subsequent purchaser or encumbrancer and shall be bound by the proceedings in the action to the same extent and in the same manner as if the purchaser or encumbrancer were a party thereto ….

(3) The lis pendens may be discharged upon the condition and in the manner provided by s. 811.22 for discharging an attachment or by s. 806.19(1)(a) for satisfying a judgment."

Section 811.22 provides, "When the defendant recovers judgment … subject to the plaintiffs rights on appeal, and he or she may maintain an action [for damages from the attachment] …. Upon the entry of final judgment in favor of the defendant or on satisfaction of a plaintiff’s judgment, the clerk of court shall, if real estate was attached, certify the fact of the judgment or satisfaction, and on recording the certificate with the register of deeds in any county in which attached lands are situated the register shall enter the certificate upon the records of his or her office in discharge of the attachments (emphasis added)."

Section 806.19 provides, "(1)(a) A judgment may be satisfied in whole or in part … by an instrument signed and acknowledged by the owner … signed and entered on the judgment and lien docket in the county where first entered."

Related Links

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Case Analysis

The court concluded, "An attachment is released under Wis. Stat. sec. 811.22 when either (1) the defendant finally prevails against the plaintiff and the claims used to obtain the attachment are extinguished, or (2) the plaintiff prevails and the defendant satisfies the judgment so that the attachment is no longer needed to ensure payment. However, the defendant’s final judgment is subject to the plaintiff’s rights on appeal, and the plaintiff’s judgment usually remains unsatisfied until after the appellate process is complete — would be unusual for a defendant to satisfy the judgment and then appeal it. For the same reason, Wis. Stat. sec. 806.19(1)(a) — the satisfaction of judgment statute — implicitly relies on exhaustion or expiration of the appeals period because a defendant has no reason to satisfy a judgment he or she anticipates will be overturned on appeal."

The court reasoned, "In any given action, the parties would naturally be bound by the results of appellate proceedings. Since purchasers are to be bound as if they were parties, they too must be bound by appellate proceedings. Thus, discharging the lis pendens before the expiration or exhaustion of the appellate process defeats both the notice and preservation objectives."

Accordingly, the court reversed the discharge of the lis pendens.

Click here for Case Analysis.

David Ziemer can be reached by email.

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