Land Dispute – Foreclosure

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WI Court of Appeals – District IV

Case Name: Global Proppant Supply, LLC, v. Shadowland Holdings, LLC, et al.

Case No.: 2019AP655

Officials: Blanchard, Graham, and Nashold, JJ.

Focus: Land Dispute – Foreclosure

This is a second appeal in this case. See Global Proppant Supply, LLC v. Tuttle, No. 2017AP1137, unpublished slip op. (WI App March 22, 2018) (“Global I”). As explained in detail in Global I, this is a long running dispute involving conflicting claims to rights in Juneau County land. See Global I, No. 2017AP1137, ¶¶5-11. The land was at one time intended to be used as a frac sand mine, but those plans have been abandoned, at least at all times pertinent to issues addressed in Global I and this appeal. See id. Lender Global Proppant Supply brought this foreclosure action against property owner Shadowland Holdings and named four sets of persons who had sold parcels to Shadowland Holdings for the mining operation. See id. Global had provided loans, which were secured by the parcels, financing the purchases of the land by Shadowland. Id. Shadowland defaulted on the Global loans, resulting in this action by Global to foreclose on parcels that the sellers had sold to Shadowland. Id.

From this point forward, we assume the reader’s complete familiarity with Global I, including its four specific conclusions, one of which is central to the first issue we address. See id., ¶¶4, 64. We fill in additional background as necessary to explain issues pertinent to this appeal. Global is the appellant in this appeal and the respondents are the parties we referred to in Global I as the Stickney Group and the Strohmeyer Group. See id., ¶6. In this opinion we refer to the Stickney Group and the Strohmeyer Group collectively as “the sellers.”

The first issue in this appeal involves the law of the case doctrine. Global argues that Judge Hepler, following remand, erred in failing to apply that doctrine to preclude the sellers from revisiting an issue that we resolved in Global I. That issue is whether the sellers’ options to repurchase the property, as established in the Repurchase Agreements (as written and not as they were reformed by Judge Roemer), had ripened—in other words, had the ability of the sellers to exercise these repurchase options ripened. See id., ¶53. We agree with Global that the sellers cannot relitigate in any court this execution-of-the-options issue based on the contents of the record as it existed at the time of Global I. As a result, we agree with Global that Shadowland could not use quitclaim deeds to transfer its property interests to the sellers shortly after Judge Roemer issued the rulings challenged in Global I. Use of the quitclaim deeds was impermissible because it was an attempt to exercise the sellers’ rights under the Repurchase Agreements as they had been reformed by Judge Roemer, and we determined in Global I that the reformation was error. Accordingly, we reverse this aspect of the judgment entered by Judge Hepler.

The second issue involves the concept of the “waste” of property held as security. Global argues that it would violate an order of Judge Roemer, entered prior to Global I, prohibiting “[a]ll parties and all persons claiming under them” “from committing waste upon the Mortgaged Property” for Shadowland to transfer the parcels to the sellers. Judge Hepler rejected this argument and we affirm on this issue.

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Derek A Hawkins is trademark corporate counsel for Harley-Davidson. Hawkins oversees the prosecution and maintenance of the Harley-Davidson’s international trademark portfolio in emerging markets.