Note: We are crunching Supreme Court of Wisconsin decisions down to size. The rule for this is that no justice gets more than 10 paragraphs as written in the actual decision. The "upshot" and "background" sections do not count as part of the 10 paragraphs because of their summary and very necessary nature. We've also removed citations from the opinion for ease of reading, but have linked to important cases cited or information about them. Italics indicate WJI insertions except for case names, which also are italicized.
The case: Danelle Duncan v. Asset Recovery Specialists, Inc.
Majority: Justice Rebecca F. Dallet (24 pages), joined by Justices Ann Walsh Bradley and Brian Hagedorn and joined in large part by Justice Jill J. Karofsky.
Concurrence: Karofsky (12 pages).
Dissent: Justice Patience D. Roggensack (16 pages), joined by Justices Rebecca Grassl Bradley and Annette K. Ziegler.
We...hold that "dwelling used by the customer as a residence" includes a garage attached to the residential building in which the customer lives....We hold that claims of unconscionability are available only in "actions or other proceedings brought by a creditor to enforce rights arising from consumer credit transactions" and that a non-judicial repossession like the one Defendants performed in this case is not such an action or other proceeding. As a result, Duncan's unconscionability claim must be dismissed.
Danelle Duncan left her car in her parking spot in the garage on the ground floor of her apartment building. When she returned a short time later, the car was gone. She later learned that Defendants – Asset Recovery Specialists, Inc.; Wells Fargo Bank, N.A.; and Greg Strandlie –had entered the garage without her consent and repossessed the car.
Duncan alleges that Defendants violated the Wisconsin Consumer Act by "[e]ntering a dwelling used by the customer as a residence except at the voluntary request of a customer" during the repossession.
Duncan bought her car from a dealership and financed the purchase with a loan. The loan, which created a security interest in the car, was later assigned to Wells Fargo Bank. After Duncan defaulted on the loan, the Wisconsin Consumer Act provided the bank with two ways to take possession of the car. It could either obtain a judgment for return of the car by filing a replevin action or follow the statutory process for a nonjudicial repossession. Wells Fargo pursued the latter option and hired Asset Recovery Specialists, owned by Greg Strandlie, to repossess Duncan's car.
At that time, Duncan lived in a multi-story, multiunit apartment building. The ground floor of the building is made up entirely of parking for residents and includes at least 56 parking spaces. Duncan leased a parking space in the garage under an agreement separate from her apartment lease. To access the residential floors and apartments from the garage, or to enter the garage on foot from the outside, residents must use keys. To drive into the garage, residents must use a garage door opener.
When Strandlie and one of his employees arrived to repossess Duncan's car, however, they found the garage door open. They went in, located Duncan's car, and towed it away. Neither Strandlie nor the employee interacted with Duncan at the time. A maintenance worker was in the garage at the time of the repossession and did not object.
Duncan filed this case in circuit court alleging, among other things, that Defendants violated Wis. Stat. § 425.206(2)(b) when they entered the parking garage to repossess her car and that Defendants' conduct during and after the repossession was unconscionable in violation of Wis. Stat. § 425.107(1).
To determine whether the repossession was proper, we must therefore answer a single question: Did Defendants enter "a dwelling used by [Duncan] as a residence" when they repossessed her car from the first-floor parking garage of her apartment building?....
Although "dwelling" is undefined in the Wisconsin Consumer Act, it is a common word and the parties generally agree on its ordinary, dictionary definition. "Dwelling" typically refers to "a building or other shelter in which people live." In other words, a dwelling is a building in which at least one person lives.
That definition is consistent with the use of "dwelling" elsewhere in the statutes at the time the Wisconsin Consumer Act was adopted in 1971. The word "dwelling" appears twice in the Act and was defined in a subsequent administrative rule.
That rule specifies that..."dwelling" includes "any garage, shed, barn or other building on the premises whether attached or unattached...."
Based on that definition, Duncan's "dwelling" includes the parking garage, because it is located in the building in which she lives. The remaining question then is whether the phrase "used by the customer as a residence" nevertheless excludes the garage.
Despite the parties' general agreement on the common meaning of "dwelling," they offer competing readings of the phrase "used by the customer as a residence." Defendants assert that a "residence" is the place where a person "actually lives." They conclude that "used by the customer as a residence" limits "dwelling" to only the parts of the building that are also "integral parts" of a residence; for example, the areas in which a person might sleep, eat, cook, or shower. Because Duncan did not sleep, eat, cook, or shower in the garage, Defendants claim that they could lawfully enter the garage because it was not used by Duncan as a residence. In contrast, Duncan suggests that "used by the customer as a residence" simply distinguishes her particular dwelling from all other dwellings. She therefore acknowledges that Defendants would not have violated (the law) if they had repossessed her car from the parking garage of a different apartment building, or while it was parked in a friend's open garage.
We agree with Duncan's interpretation and conclude that "used by the customer as a residence" distinguishes the customer's dwelling from all other dwellings....
We turn next to Duncan's claim of unconscionability pursuant to Wis. Stat. § 425.107(1). We begin with the language of the statute: "With respect to a consumer credit transaction, if the court as a matter of law finds that any aspect of the transaction, any conduct directed against the customer by a party to the transaction, or any result of the transaction is unconscionable, the court shall, in addition to the remedy and penalty authorized in sub. (5), either refuse to enforce the transaction against the customer, or so limit the application of any unconscionable aspect or conduct to avoid any unconscionable result." The statute enumerates a number of different factors the court may consider pertinent to determining whether a transaction, conduct directed against the customer, or the result of the transaction are unconscionable... [U]pon a finding of unconscionability a customer may recover statutory and actual damages....
We agree with the federal courts that the law bars a customer from bringing a claim of unconscionability...except in response to "actions or other proceedings brought by a creditor."...
[W]e conclude that a nonjudicial repossession...is not one of the "actions or other proceedings brought by a creditor" contemplated....
I agree that Defendants violated Wis. Stat. § 425.206(2)(b) by entering Duncan's "dwelling" and concur in the court's ultimate mandate. I disagree, however, with the conclusion that a customer can never raise unconscionability as a defense to a non-judicial repossession. Because the applicable statutes plainly permit an unconscionability defense, I respectfully concur.
The unconscionability defense codified in Wis. Stat. § 425.107 entitles a customer to additional relief "if the court as a matter of law finds that any aspect of the transaction, any conduct directed against the customer by a party to the transaction, or any result of the transaction is unconscionable." I agree with my colleagues that this defense is subject to the scope provision (by law), and as such is only available in response "to actions or other proceedings brought by a creditor to enforce rights arising from consumer credit transactions" (emphasis added). I further agree that a non-judicial repossession is not an "action." We diverge, however, on whether a non-judicial repossession constitutes a "proceeding."
"Proceeding" is neither specially defined nor technical and therefore carries its "common, ordinary, and accepted meaning."...
The Oxford English Dictionary's leading "Law" definition for "proceeding" broadly includes "[a] legal action or process." That breadth is mirrored in another dictionary's "proceeding" definition: "A course of action; a procedure." (American Heritage Dictionary) These broad dictionary definitions match comprehensive judicial definitions of "proceeding." Several courts have recited the Words and Phrases definition that "proceeding" is "a very comprehensive term" generally meaning "a prescribed course of action for enforcing a legal right."
Taken together, the dictionary and judicial definitions of "proceeding" as well as that word's usage in common parlance converge on one, comprehensive common, ordinary, and accepted meaning: a legally prescribed process for enforcing a legal right.
Applying the common, ordinary, and accepted meaning of "proceeding," I conclude that "other proceedings" includes a non-judicial repossession. A non-judicial repossession is a legally prescribed process for enforcing a legal right. The statute prescribes the initiating notice, the 15-day wait period, and the prohibitions against both "breach[ing] of the peace" and entering "a dwelling used by the customer as a residence." It matters not that the legislature made a policy decision to cut out the expense and time of litigation. Nothing in that policy choice indicates a simultaneous desire to foreclose a customer in Duncan's position from even requesting judicial scrutiny of unconscionable creditor conduct. Quite the opposite. The legislature directs us to "liberally construe and appl[y]" the entire Act to "protect customers against . . . unconscionable practices by merchants." Put simply, the statutorily prescribed non-judicial repossession process to enforce a creditor's right to collateral plainly constitutes an "other proceeding brought by a creditor to enforce rights arising from [a] consumer credit transaction" under (the law.)
Before concluding that Duncan can bring her unconscionability claim here, I address one last wrinkle. At common law, unconscionability claims arose defensively. That is precisely the posture Duncan is in here, albeit not in the traditional sense. Duncan raises unconscionability as a defense to Defendants enforcing their right to repossess her car. Had that repossession commenced via a replevin action, Defendants would have filed a complaint and Duncan would raise unconscionability in her answer or some post-judgment filing if the unconscionable conduct occurred during or after the repossession. But a non-judicial repossession dispenses with these traditional pleadings. Therefore, Duncan can raise unconscionability only in her own complaint....
I conclude that Duncan could raise an unconscionability defense to Defendants' non-judicial repossession. Here, however, her allegations do not as a matter of law rise to the level of unconscionable. Therefore, I concur in the court's ultimate mandate and join all but (five paragraphs) of the majority/lead opinion.
The majority opinion follows the errant lead of the court of appeals. Instead of interpreting "dwelling" within the structure of the statute in which it appears, e.g., "used by the customer as a residence," and instead of relying on Danelle Duncan's own statements that she never lived or resided in the apartment building's garage, the majority opinion ignores a plain-meaning analysis of (the law). Rather, it patches together a hodgepodge of theories in order to affirm the court of appeals. Because I conclude that the plain meaning of (the law) does not apply to the apartment building's garage, which Duncan shared with many others and has said in two court proceedings that she has never lived or resided in, I would reverse the court of appeals and affirm the summary judgment granted by the circuit court. Therefore, I respectfully dissent from the majority opinion.
After her car was repossessed, Duncan sued the towing company, its owner, and the Wells Fargo.
As part of its proceedings, the district court found there "are no living quarters, places to sleep, cook, eat, watch television, use a restroom or bathe or shower in the garage area, [and that] Duncan admits that she has never lived or resided in the garage." The court made various other findings relative to her federal claim and then granted the defendants' motion for summary judgment in part. It dismissed her federal claim and any portion of her state claims against Wells Fargo that was based on alleged unlawful retention of Duncan's personal property.
Duncan sued in circuit court and lost. She appealed and won.
Although, "dwelling" is not defined in regard to portions of statutes that set out provisions that relate to Wisconsin consumer transactions, I note that findings of the earlier trial courts who considered this dispute provide the factual context in which we interpret "dwelling," as that term appears in § 425.206(2)(b).
For example, the circuit court found that the apartment building's garage contained spaces for more than 50 cars, with no tenant having a right to exclude others, which the circuit court also found was in contrast to single-family homes where there is a right to exclusive control over the garage. Duncan agreed that she did not have the right to exclude others from the apartment building's garage. Therefore, she could not bring suit for criminal trespass to dwellings or for trespass to land which she tried to do before filing in federal district court.
It is undisputed that Duncan does not sleep in the garage. The district court found that there "are no living quarters, places to sleep, cook, eat, watch television, use a restroom or bathe or shower in the garage area, [and that] Duncan admits that she has never lived or resided in the garage....
[I]n order to fit within the structure of (the law) the apartment building's garage must be the place where Duncan actually lives – where she resides. She has admitted that she never lived or resided in the apartment building's garage, and the district court and the circuit court both so found. Instead, she rented a parking space in a garage shared by other residents and maintained by a third-party apartment owner. Therefore, based on the plain meaning of the statute that the legislature enacted, and undisputed material facts, I conclude that the apartment building's garage where Duncan parked her car is not a "dwelling" within the meaning of § 425.206(2)(b).
The court of appeals' decision avoids a plain-meaning interpretation of (the statute) to seek a different result than a plain-meaning interpretation will permit. The majority opinion's use of (administrative code) is less direct than that of the court of appeals, but nevertheless it employs (administrative code) to support its analysis. Furthermore, the majority opinion's hodgepodge of definitions totally ignores the structure of § 425.206(2)(b) which limits "dwelling" according to how the customer uses that space. Again, it appears the majority opinion did so...to obtain a result that the plain meaning of the words the legislature enacted will not permit.
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