2009AP3029 Crown Castle USA, Inc., v. Orion Construction Group, LLC

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Debtor-Creditor
Supplemental examinations

Circuit courts and court commissioners have authority under secs. 816.03 and 816.06 to require a third-party company sharing common ownership with a judgment debtor to submit to a supplemental examination.

“A judgment creditor has the right to apply any property of the judgment debtor or due to the judgment debtor, not exempt from execution, toward the satisfaction of the judgment. Wis. Stat. § 816.08. That includes marital property where a judgment is taken against one spouse. Wis. Stat. §§ 766.55(2)(b), 803.045(3). In Courtyard Condo., we rejected the spouse’s argument ‘that while a judgment creditor can satisfy a judgment from marital property, he or she cannot examine the spouse of the judgment debtor to determine the amount and location of the marital property[,]’ concluding it defied ‘common sense.’ Courtyard Condo., 244 Wis. 2d 153, ¶14. ‘Without examining the spouse of the judgment debtor, the judgment creditor would lack the information needed to proceed against the spouse … to reach marital property.’ Id., ¶15. The implicit purpose of our Courtyard Condo. holding was to prevent a judgment debtor from insulating marital property from a judgment creditor by transferring it to his or her spouse.”
“The same rationale applies here. Property not wholly exempt from execution may be subject to a fraudulent transfer action under Wis. Stat. ch. 242 to set aside the transfer. Wis. Stat. § 815.18(10); see also Wis. Stat. §§ 242.04-242.07. Property transfers between a judgment debtor and related business entities present the same risk of fraud as those between spouses. Examination of the alleged third-party recipient may be the only method available to a judgment creditor to ascertain whether a fraudulent transfer has occurred.”

Affirmed.

Recommended for publication in the official reports.

2009AP3029 Crown Castle USA, Inc., v. Orion Construction Group, LLC

Dist. III, Outagamie County, Dyer, J., Brunner, J.

Attorneys: For Appellant: Koehler, Charles D., Appleton; For Respondent: Moenck, Nathan, Madison; McLeod, Eric M., Madison

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