By: Derek Hawkins//June 6, 2018//
WI Supreme Court
Case Name: Federal National Mortgage Association v. Cory Thompson
Case No.: 2018 WI 57
Focus: Foreclosure – Claim Preclusion
This appeal comes before the court on certification by the court of appeals.1 Cory Thompson, the debtor defendant, appeals an order of the Dane County Circuit Court, Amy Smith, Judge, granting Federal National Mortgage Association a foreclosure judgment and a monetary judgment of $152,355.98, plus any amounts held in escrow, interest after August 16, 2012, and costs incurred by Federal National Mortgage Association.
The issue certified is as follows: Where a foreclosure action brought on a borrower’s default on a note has been dismissed, is the lender barred by claim preclusion from bringing a second foreclosure action on the borrower’s continuing default on the same note?
Essentially, we must answer the following question: When a foreclosure action brought on the borrower’s default on the note has been dismissed with prejudice, and the lender had not validly accelerated payment of the amount due under the note, does claim preclusion bar the lender from bringing a second foreclosure action based upon the borrower’s continuing default on the same note?
We conclude that when a lender does not validly accelerate payment of the amount due under the note and a foreclosure action brought on the borrower’s default on an installment payment under the note has been dismissed with prejudice, claim preclusion does not bar the lender from bringing a subsequent foreclosure action based upon the borrower’s continuing default on the same note.
Affirmed
Concur:
Dissent:
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