GMAC Mortgage Corporation of Pennsylvania v. Michael Gisvold
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SUPREME COURT OF WISCONSIN Case No.: 96-1663 Complete Title of Case: GMAC Mortgage Corporation of Pennsylvania, f/k/a GMAC Mortgage Corporation of Iowa, Plaintiff, Randall Cudd and Jim Claycomb, Intervenors-Respondents-Petitioners, v. Michael Gisvold and Drew Gisvold, Defendants-Appellants, United States of America, U.S. Attorney General, Chicago Title Insurance Company, a/k/a Old Republic National Insurance Company, Title Insurance Company of Minnesota, Defendants. ON REVIEW OF A DECISION OF THE COURT OF APPEALS Reported at: 206 Wis. 2d 396, 557 N.W.2d 826 (Ct. App. 1996) PUBLISHED Opinion Filed: Submitted on Briefs: Oral Argument: Source of APPEAL COURT: COUNTY: JUDGE: JUSTICES: Concurred: Dissented: Not Participating: January 28, 1998 October 7, 1997 Circuit St. Croix Eric J. Lundell ATTORNEYS: For the intervenors-respondents-petitioners there were briefs by Catherine R. Quiggle and Rodli, Beskar, Boles & Krueger, S.C., River Falls and oral argument by Catherine R. Quiggle. For the defendants-appellants there was a brief by R. Michael Waterman and Mudge, Porter, Lundeen & Seguin, S.C., Hudson and oral argument by R. Michael Waterman. No. 17122.rtf NOTICE This opinion is subject to further editing and modification. The final version will appear in the bound volume of the official reports. No. 96-1663 STATE OF WISCONSIN : IN SUPREME COURT FILED GMAC Mortgage Corporation of Pennsylvania, f/k/a GMAC Mortgage Corporation of Iowa, JAN 28, 1998 Plaintiff, Marilyn L. Graves Clerk of Supreme Court Madison, WI Randall Cudd and Jim Claycomb, Intervenors-RespondentsPetitioners, v. Michael Gisvold and Drue Gisvold, Defendants-Appellants, United States of America, U.S. Attorney General, Chicago Title Insurance Company, a/k/a Old Republic National Insurance Company, Title Insurance Company of Minnesota, Defendants. REVIEW of a decision of the court of appeals. ¶1 N. PATRICK CROOKS, J. Reversed. Petitioners seek review of a published decision of the court of appeals,1 reversing an order of the circuit court for St. Croix County, the Honorable Eric. J. Lundell 1 presiding. The circuit court excused the GMAC v. Gisvold, 206 Wis. 2d 396, 557 N.W.2d 826 (Ct. App. 1996). 1 No. 17122.rtf petitioners' non-compliance with Wis. Stat. § 846.17 (1993-94),2 which requires the purchaser at a foreclosure sale to submit the balance of the purchase price within ten days of confirmation of the sale, and afforded the petitioners an opportunity complete the purchase in accordance with § 846.17. to The circuit court further determined that the redemption period allowed for the respondents had expired and, consequently, their attempt to redeem the property was not valid. ¶2 court The court of appeals reversed, concluding the circuit had no equitable authority to waive the petitioners' statutorily imposed payment requirements. The court of appeals reasoned § 846.17, the language in Wis. Stat. commanding forfeiture of the purchasers' deposit and resale of the property if the ten-day time period is not complied with, is mandatory. As such, deposit. the petitioners The court of had appeals forfeited further their ten determined percent that the respondents had properly redeemed the property. ¶3 Upon review, we conclude that the respondents did not successfully redeem the property when they paid the balance of their mortgage on March 19, 1996. language of Wis. Stat. § 846.17 We further conclude that the is mandatory insofar as it requires forfeiture of a purchaser's deposit and resale of the property in the event the purchaser does not comply with the ten-day time limitation. Therefore, when a purchaser fails to submit the balance of the purchase price within ten days of confirmation of the sale, a circuit 2 court has no equitable All future references to the Wisconsin Statutes will be to the 1993-94 version of the statutes. 2 No. 17122.rtf authority to excuse non-compliance and must adhere to the statute by ordering forfeiture of the purchaser's deposit and resale of the property. We also conclude that Wis. Stat. § 846.165 contemplates notice to the purchaser at a foreclosure sale of when the sale is confirmed, when the mortgagor's redemption period ends, and when the purchaser's ten-day period for payment of the purchase price balance expires. conclude mandate that of the Wis. petitioners Stat. Finally, we complied § 846.17 with the statutory because they submitted the balance of the purchase price within ten days of the effective date of the confirmation of the sale which was June 5, 1996. Accordingly, we reverse the decision of the court of appeals. I. ¶4 The relevant facts, though confusing, are not in dispute. Drue Gisvold Mortgage defaulted Corporation on lengthy and somewhat In 1992, respondents Michael and their ("GMAC"). home GMAC mortgage held initiated by GMAC foreclosure proceedings, and a foreclosure judgment was entered on April 27, 1993, in favor of GMAC. scheduled for the A sale of the home was subsequently following November. The sale did not transpire because Drue Gisvold filed a Chapter 13 bankruptcy petition shortly before the scheduled sale. That bankruptcy petition was voluntarily dismissed on January 5, 1994. ¶5 A foreclosure sale was thereafter scheduled and was conducted on March 15, 1994. Claycomb were the Petitioners Randall Cudd and Jim successful bidders at the sale. They deposited ten percent of the purchase price, and the sale was 3 No. 17122.rtf subsequently confirmed on March 30, 1994. Cudd and Claycomb submitted the remaining balance of the purchase price to the clerk of courts within ten days of the confirmation of the sale pursuant to Wis. Stat. § 846.17. ¶6 On April 6, 1994, the Gisvolds filed a motion to vacate the circuit court's order confirming sale, arguing they did not receive sufficient notice of the confirmation hearing. Receiving no objection to the motion, the circuit court vacated the order confirming sale on June 3, 1994. ¶7 1994. The confirmation hearing was rescheduled for July 8, prior Michael Gisvold filed a Chapter 11 bankruptcy petition to hearing the was bankruptcy scheduled canceled. court for hearing GMAC relief date, brought from the and a the confirmation motion automatic before stay the of the foreclosure proceeding initiated by the filing of the bankruptcy petition. On February 13, 1995, the bankruptcy court granted GMAC's motion for relief. ¶8 The confirmation hearing was again rescheduled and set for April 6, 1995. The circuit court denied GMAC's motion to confirm the foreclosure sale in an order dated April 17, 1995. However, the circuit schedule another court's foreclosure order sale provided and that commence GMAC could posting and publishing notice of such sale. ¶9 A second foreclosure sale was conducted on June 13, 1995, and it is the events surrounding the confirmation of this sale which provide the basis for the dispute before us now. the sale, bidders. Cudd and Claycomb were once again the At successful They deposited ten percent of the purchase price, and 4 No. 17122.rtf a confirmation hearing was scheduled for June 27, 1995. Prior to the scheduled hearing, the foreclosure proceeding was stayed due to Drue Gisvold filing another bankruptcy petition seeking relief under Chapter 13 of the Bankruptcy Code. The bankruptcy petition was dismissed voluntarily on July 25, 1995, and the confirmation hearing was rescheduled for October 3, 1995. Again, the hearing did not take place because Michael Gisvold filed a bankruptcy petition. That bankruptcy petition was voluntarily dismissed on October 19, 1995. ¶10 The confirmation hearing was rescheduled for a third time and set for December 27, 1995. place. This hearing did take As a purchaser of the foreclosed property, Cudd was present at the hearing.3 The circuit court granted GMAC's application for confirmation of the sale. However, in accord with an in-court stipulation between GMAC and the Gisvolds, the circuit court January 15, stayed 1996, to redeem the property.4 entry of allow the the confirmation Gisvolds order additional until time to The order indicated that if the Gisvolds 3 We find no specific evidence in the record indicating that Cudd and Claycomb received notice of the confirmation hearing. Because purchasers are "quasi-parties" appearing in an action to confirm a foreclosure sale and may appeal orders affecting their right to confirmation of the sale, Gumz v. Chickering, 19 Wis. 2d 625, 121 N.W.2d 279 (1963), they should receive notice of the confirmation hearing. See John S. Goodland, Mortgage and Land Contract Foreclosures in Wisconsin § 9.02 (1989). We assume such notice was given in this case since Cudd was present at the hearing. 4 The record does not include a transcript of the December 27, 1995, hearing setting forth the oral stipulation between GMAC and the Gisvolds. However, the parties do not dispute that the stipulation was in fact entered into at that time, and the circuit court's order dated January 16, 1996, incorporates the in-court stipulation. 5 No. 17122.rtf did not redeem the property by January 15, 1996, at 4:00 p.m., the sale would be approved and confirmed effective January 16, 1996, and Cudd and Claycomb would have ten days from January 16, 1996, to pay the balance of the purchase price to complete the sale. ¶11 amend On January 12, 1996, GMAC and the Gisvolds agreed to their stipulation and extend the period for an additional two days. Gisvolds' redemption The circuit court approved the stipulation on January 12, 1996, and amended its original order in light of the fact that January 15, 1996, was a federal holiday. Because all banks would be closed on that day, it would impact the Gisvolds' ability to transfer funds to redeem the property. The specific terms of the amended order provided that if the Gisvolds did not redeem the property by January 17, 1996, at 4:00 p.m., the foreclosure sale would be approved and confirmed would effective thereafter be balance of the January given purchase 18, ten 1996, days price to with and Cudd deposit the clerk and the of Claycomb remaining courts to complete the sale. ¶12 On January 17, 1996, approximately three hours before the Gisvolds' redemption period was to expire, Michael Gisvold filed yet another bankruptcy petition, Chapter 13 of the Bankruptcy Code. seeking relief under The bankruptcy petition was voluntarily dismissed on March 12, 1996. Cudd and Claycomb did not receive notice of the bankruptcy dismissal. ¶13 On March 19, 1996, in an attempt to redeem their property, the Gisvolds paid the balance due on their mortgage to the clerk of courts for St. Croix County. 6 It was only after the No. 17122.rtf Gisvolds made this payment that Cudd and Claycomb became aware the bankruptcy petition had been dismissed. At no point during the period between the December 27, 1995, confirmation hearing and the Gisvolds' attempt to redeem the property on March 19, 1996, did Cudd and Claycomb submit the balance of the purchase price to the clerk of courts to complete the sale. ¶14 GMAC brought a motion for a determination of whether the Gisvolds had successfully redeemed their property or whether Cudd and Claycomb still had a right to purchase the property. GMAC took no position property. regarding either party's right to the The circuit court determined that the period allowed for redemption in accord with the stipulation had expired and, therefore, the Gisvolds had not properly redeemed the property. The circuit court further concluded that Cudd and Claycomb's failure to submit the purchase price within ten days of the confirmation of the sale was excusable in light of the fact that they had not been notified of the dismissal of the bankruptcy petition and submitting thus not know balance the did of the when the purchase ten-day price period expired. for The circuit court exercised its discretion and held that Cudd and Claycomb property. should be afforded Accordingly, the an opportunity circuit court to purchase ordered the the sale confirmed as of June 5, 1996, and determined Cudd and Claycomb had ten days from that date to 7 submit the balance of the No. 17122.rtf purchase price.5 Within the time allowed, Cudd and Claycomb submitted the balance to complete the purchase. ¶15 court The court of appeals reversed, concluding the circuit does not have the equitable authority to waive a purchaser's non-compliance with Wis. Stat. § 846.17. The court of requiring appeals forfeiture held that of the the deposit language and of resale the of statute, the property if a purchaser does not comply with the ten-day payment period, is mandatory. The court of appeals determined that although a circuit court has discretion in confirming a foreclosure sale, that discretion does not extend to granting equitable relief to Cudd and Claycomb in violation commanding forfeiture and resale. of the statutory mandate The court of appeals further determined that the Gisvolds validly redeemed the property, and that because Cudd and Claycomb failed to tender the balance of the purchase price within the time required, they forfeited their ten percent deposit. ¶16 We are presented with five issues arising from the foregoing facts, some of which are interrelated. First, did the Gisvolds properly redeem the property when they tendered the balance of their mortgage to the clerk of courts on March 19, 1996? Second, is the language of Wis. Stat. § 846.17, which 5 The record does not include a hearing transcript dated June 5, 1996. A detailed review of the record and discussions with the St. Croix County clerk of courts lead us to conclude that Record 19 is a transcript from the June 5, 1996, hearing but was erroneously dated as a transcript from a February 29, 1996, hearing. No hearing occurred on February 29, 1996, in this case. The subject matter referenced in Record 19 and a review of the St. Croix circuit court hearing minutes evinces that Record 19 is, in fact, a transcript from the June 5, 1996, hearing. 8 No. 17122.rtf commands forfeiture of a purchaser's deposit and resale of the property, mandatory or directory? Third, if we determine the language of Wis. Stat. § 846.17 is mandatory, does the circuit court have the equitable authority to excuse a purchaser's noncompliance with Claycomb comply determine Cudd Wis. Stat. with and Wis. Claycomb § 846.17? Stat. did Fourth, § 846.17? not comply did Cudd Fifth, with if Wis. and we Stat. § 846.17, have they forfeited their ten percent down payment? Each of these issues will be addressed in turn. II. ¶17 redeemed We first consider their property. whether Because the Gisvolds the successfully relevant facts are undisputed, this is a question of law and one this court reviews de novo. See State v. Williams, 104 Wis. 2d 15, 21-22, 310 N.W.2d 601 (1981). ¶18 property The Gisvolds' rights with respect to redemption of the were stipulations incorporated defined between into the pursuant themselves circuit to the and court's provisions GMAC, orders. of which The the were original stipulation was entered into at the December 27, 1995, hearing and constituted a binding in-court stipulation pursuant to Wis. Stat. § 807.05.6 6 The amended stipulation, which was signed by Wis. Stat. § 807.05 states: Stipulations. No agreement, stipulation, or consent between the parties or their attorneys, in respect to the proceedings in an action or special proceeding shall be binding unless made in court or during a proceeding conducted under s. 807.13 or 967.08 and entered in the minutes or recorded by the reporter, or 9 No. 17122.rtf the parties and approved by the court on January 12, 1996, was also binding with respect to the Gisvolds' redemption rights since it was made in writing and subscribed by the parties' attorneys. See Wis. Stat. § 807.05. Therefore, the amended stipulation and order provides a basis for a determination of the date upon which the Gisvolds' redemption rights expired. See Wyandotte Chem. Corp. v. Royal Elec. Mgf. Co., Inc., 66 Wis. 2d 577, 589, 225 N.W.2d 648 (1975); Thayer v. Federal Life Ins. Co., 217 Wis. 282, 285-86, 258 N.W. 849 (1935). ¶19 The amended stipulation and order set forth January 17, 1997, at 4:00 p.m., as the date and time upon which the Gisvolds' redemption rights would expire. Approximately three hours before their redemption period expired in accord with the stipulation, Michael Gisvold filed a bankruptcy petition. The Gisvolds argue that the filing of the bankruptcy petition did not extend their redemption rights. ¶20 We disagree. It is within our jurisdiction to review whether the bankruptcy petition stayed the foreclosure proceeding as a state court has jurisdiction to determine whether the action pending before it is subject to a stay under the Bankruptcy Code. See State v. Weller, 189 B.R. 467, 471 (Bankr. E.D. Wis. 1995); see also In re Cummings, 201 B.R. 586, 588 (Bankr. S.D. Fla. 1996); Board of Directors v. Resolution Trust Corp., 161 B.R. 860, 862 (Bankr. D.C. 1993). The interpretation of a federal statute is an issue of law, which this court reviews de novo. See Franklin v. 425-26, Housing Auth. of Milwaukee, 155 Wis. 2d 419, N.W.2d 668 (Ct. App. 1990). made in writing and subscribed by the bound thereby or the party's attorney. 10 party to be 455 No. 17122.rtf ¶21 Code, Under the automatic stay provision of the Bankruptcy Michael Gisvold's bankruptcy filing stayed the commencement or continuation of any action or proceeding against See 11 U.S.C. § 362(a)(1).7 him. broad and provides for the The language of § 362 is very stay of virtually any type of creditor activity against the debtor or the debtor's estate. See Collier on Bankruptcy (Lawrence P. King et al. eds., 15th ed. 1997). The stay is automatic and is not premised on notice to any party, including the creditor. See id. It applies to prevent the continuation of a foreclosure proceeding "[a]s long as the debtor retains property . . . ." any Arthur legal M. Mortgage Foreclosures 265 (1989). or equitable Moglowsky et interest al., in Wisconsin The provisions of § 362 stay proceedings against the debtor until the time the bankruptcy case is closed, or until the dismissed, whichever is earlier. ¶22 time the bankruptcy case is See 11 U.S.C. § 362(c)(2). Notwithstanding the broad application of § 362, some federal courts have held, and there is a strong argument, that § 362 does not work to indefinitely stay a redemption period. See Goldberg v. Tynan, 773 F.2d 177 (7th Cir. 1985); Johnson v. First Nat. Bank of Montevideo, Minn., 719 F.2d 270, 277 (8th Cir. 1980), cert. denied 105 S. Ct. 1015 (1984). Rather, when the automatic stay provisions of § 362 become effective, "time deadlines for debtors . . . are tolled" pursuant to 11 U.S.C. § 108. Richard S. Ralston, Bankruptcy Stays: 7 A Practitioner's All future references to the United States Code will be to the 1995 version. 11 No. 17122.rtf Guide to Stays and Relief from Stays 37 (1990). Section 108(b) states, in pertinent part: (b) . . . if applicable nonbankruptcy law, an order entered in a nonbankruptcy proceeding, or an agreement fixes a period within which the debtor . . . may . . . cure a default, and such period has not expired before the date of the filing of the petition, the trustee may only . . . cure . . . before the later of (1) the end of such period, including any suspension of such period occurring on or after the commencement of the case; or (2) 60 days after the order for relief. (emphasis supplied). ¶23 The Seventh Circuit Court of Appeals addressed the issue of whether § 362 stays, or § 108(b) tolls, the debtor's redemption period in Goldberg v. Tynan, 773 F.2d 177 (7th Cir. 1985). The Tynan court determined that in a foreclosure action under Illinois mortgage law "when a petition in bankruptcy is filed before the expiration of the applicable state redemption period, § 108(b) extends the redemption period for 60 days from the commencement of bankruptcy proceedings." Id. at 179. The Tynan court found persuasive the reasoning of the Eighth Circuit Court of Appeals in Johnson, 719 F.2d at 277, wherein the court determined that § 362 does not operate to stay the statutory redemption period set forth under Minnesota law, and that § 108 governs the running of the statutory redemption period. The Johnson court recognized that an analysis of whether § 362 stays the redemption period or § 108 tolls the redemption period must be done in conjunction with an analysis of the underlying state mortgage law as the mortgagor's 12 rights at the time the No. 17122.rtf bankruptcy petition determination. ¶24 is filed are relevant to such a See id. at 276-77. There is no decision from the Seventh Circuit Court of Appeals addressing the issue of the application of § 362 or § 108 to a mortgagor's redemption rights under Wisconsin law. We decline to decide whether the appropriate application is § 362 or § 108 because we conclude the Gisvolds failed to redeem the property under an analysis of either section. ¶25 At approximately the time 1:00 the p.m. bankruptcy on January petition 17, 1996, was filed at GMAC and the Gisvolds had entered into an agreement extending the Gisvolds' redemption period to 4:00 p.m. on January 17, 1996. If we were to determine that § 362 stayed the Gisvolds' redemption rights under 11 U.S.C. § 362(c)(2)(B), the stay was lifted on March 12, 1996the day the bankruptcy petition was dismissed. Arguably, the Gisvolds had an additional three hours after the bankruptcy petition was dismissed to the redeem the property as that was the amount of time left pursuant to the amended stipulation and order when the bankruptcy petition was filed. The exact time calculation is irrelevant, however, as the Gisvolds did not pay the balance of their mortgage until March 19, 1996seven days after their redemption rights expired if a § 362 analysis is utilized. ¶26 Under 11 U.S.C. § 108(b), the Gisvolds would have had 60 days from the date of the filing of the bankruptcy petition to redeem the property. Rule 6(a) of the Federal Rules of Civil Procedure sets forth the procedures for computing a period of time under federal law. The relevant portions of Rule 6(a) 13 No. 17122.rtf state that in computing act, . . . shall not be time periods, included" but the the "day "last of day the of the period so computed shall be included, unless it is a Saturday, a Sunday, or a legal holiday. . . ." date on 1996. which the bankruptcy The day of the act was the petition See Tynan, 773 F.2d at 179. was Therefore, January 18, 1996, was the first day of the 60-day period. date was March 17, 1996. are unable period. to count filedJanuary 17, Sixty days from that Since March 17, 1996, was a Sunday, we that date as See FED. R. CIV. P. 6(a). the last day of the time Therefore, March 18, 1996, was the last day upon which the Gisvolds could have redeemed the property.8 The Gisvolds did not pay the balance of their mortgage until March 19, 1996one day after their redemption rights expired if a § 108 analysis is utilized.9 ¶27 rights The Gisvolds were fully aware of when their redemption ended. They were present at the December 27, 1995, 8 In their brief, Cudd and Claycomb argue that the Gisvolds did not redeem the property pursuant to 11 U.S.C. § 108 because they did not cure the mortgage default prior to the date the bankruptcy petition was dismissed. The language of § 108(b) does not address application of the tolling provisions in an instance where the bankruptcy petition is dismissed, and we find it unnecessary to consider the issue. The bankruptcy petition was dismissed on March 12, 1996, and the 60-day time period would not have expired until March 18, 1996. We reach our conclusion in consideration of the 60-day time period, which encompasses the date of the dismissal of the bankruptcy petition. 9 The Gisvolds argue that 11 U.S.C. § 108(b) does not extend their redemption rights as debtors because the specific language indicates that only the "trustee" may cure a default. This analysis is inaccurate as the term "trustee" properly includes any "debtor in possession." See Johnson v. First Nat'l Bank of Montevideo, 719 F.2d 270 (8th Cir. 1983); In re Flying S. Land & Cattle Co., Inc., 77 B.R. 183 (Bankr. D. Nev. 1987). 14 No. 17122.rtf hearing and were parties to the first stipulation. Similarly, the Gisvolds were parties to the amended stipulation and were apprised of the redemption period order for approving two additional the extension days. of Finally, their as the party initiating the January 17, 1996, bankruptcy proceeding, Michael Gisvold was also aware of the date the bankruptcy petition was filed as well as the date the bankruptcy petition was dismissed. ¶28 We recognize that redemption is remedial in nature and should be liberally construed in favor of the debtor. Central Credit Union v. Bigus, 110 Wis. 2d See State 237, 241, 304 N.W.2d 148 (Ct. App. 1980); Hobl v. Lord, 157 Wis. 2d 13, 20, 458 N.W.2d 536 (Ct. App. 1990) rev'd on other grounds 162 Wis. 2d 226, 470 N.W.2d 265 (1991), cert. denied Lord v. Farm Credit Bank of St. Paul, 502 U.S. 968 (1991). However, the Gisvolds were given ample opportunity via numerous bankruptcy filings10 and stipulations redemption rights with GMAC to were defined redeem the pursuant to property. the terms Their of the amended stipulation and order and were extended by the filing of the bankruptcy petition. within the time provided. They failed to redeem the property We therefore conclude that the Gisvolds' payment of their mortgage balance on March 19, 1996, was not a proper redemption of the property. III. 10 We note that it is for the Bankruptcy court, not this court, to impose sanctions where there has been apparent abuse of the Bankruptcy Code. 15 No. 17122.rtf ¶29 Stat. We § 846.17 next consider pertinent to whether this the dispute language is of mandatory Wis. or directory. This is an issue of statutory interpretation which this court reviews de novo. See Cross v. Soderbeck, 94 Wis. 2d 331, 340, 288 N.W.2d 779 (1980). ¶30 The objective in interpreting statutory language is to identify and give effect to the intent of the legislature. See Stockbridge School Dist. v. Dep't of Pub. Instruction Sch. Dist. Boundary Appeal Bd., 202 Wis. 2d 214, 219, 550 N.W.2d 96 (1996). In an attempt to construe the legislature's intent, we first consider the plain language of the statute. See id. at 220 (quoting Jungbluth v. Hometown, Inc., 201 Wis. 2d 320, 327, 548 N.W.2d 519 (1996)). If the meaning of the statutory language is clear, we will not look outside the language of the statute to ascertain legislative intent. See Ball v. Dist. No. 4 Area Board of Vocational Technical, and Adult Educ., 117 Wis. 2d 529, 537-38, 345 N.W.2d 389 (1984). ¶31 The provisions of Wis. Stat. § 846.17 relevant to this dispute state: Upon any such sale being made the sheriff . . . shall make and execute to the purchaser . . . a deed of the premises sold . . .; and the purchaser . . . shall be let into the possession of the premises so sold on production of such deed or a duly certified copy thereof, and the court may, if necessary, issue a writ of assistance to deliver such possession. Such deed . . . shall be . . . held by the clerk until the confirmation of the sale . . ., and upon the confirmation thereof the clerk of the court shall thereupon pay to the parties entitled thereto, or to their attorneys, the proceeds of the sale, and shall deliver to the purchaser . . . such deed upon compliance by such purchaser with the terms of such sale, and the payment of any balance of the sale price to be paid. In the event of the failure of such 16 No. 17122.rtf purchaser to pay any part of the purchase price remaining to be paid within 10 days after the confirmation of such sale, the amount so deposited shall be forfeited and paid to the parties who would be entitled to the proceeds of such sale as ordered by the court, and a resale shall be had of said premises . . . . (emphasis added). ¶32 The general rule in interpreting statutory language is that "the word 'shall' is presumed mandatory when it appears in a statute." Wis. 2d 565, Karow 570, v. 263 Milwaukee N.W.2d Co. 214 Serv. Comm'n, 82 (citing Scanlon v. Civil (1978) Menasha, 16 Wis. 2d 437, 443, 114 N.W.2d 791 (1962)). Further support is given to a mandatory interpretation of "shall" when the legislature uses the words "shall" and "may" in a particular statutory section, indicating the legislature was aware of the distinct meanings of the words. ¶33 The language of See Karow, 82 Wis. 2d at 571. Wis. Stat. § 846.17, requiring forfeiture and resale of the foreclosed property, is preceded by the word "shall," evincing the legislature's intent that the language is mandatory. word "may" as well Furthermore, the legislature used the as "shall" in Wis. Stat. § 846.17.11 Therefore, we "can infer that the legislature was aware of the different denotations precise meanings." § 846.17 indicates and Id. the intended the words to have their Hence, the plain language of Wis. Stat. legislature 11 intended forfeiture and There are also numerous other sections within Wis. Stat. ch. 846 wherein the legislature specifically used both "may" and "shall." See, e.g., Wis. Stats. §§ 846.02, 846.04, 846.07, 846.08, 846.09, 846.10, 846.101, 846.102, 846.103, 846.12, 846.13, 846.14, 846.15, 846.16, 846.162. 17 No. 17122.rtf resale to be mandatory if the purchaser does not comply with the ten-day payment requirement.12 ¶34 We are not precluded from determining that the pertinent language of Wis. Stat. § 846.17 is directory if we find such "construction is demanded by the statute in order to carry out the clear intent of the legislature." City of Wauwatosa v. Milwaukee Co., 22 Wis. 2d 184, 191, 125 N.W.2d 386 (1963). However, the parties do not offer, and our research has not revealed, any legislative history lending support to the contention that the legislature intended its command to the court to be directory. ¶35 We therefore conclude that the plain language of Wis. Stat. § 846.17 is mandatory insofar as it requires the court to order forfeiture of the deposit and resale of the premises if 12 The Gisvolds urge us to undertake the analysis of Karow v. Milwaukee Co. Civil Serv. Comm'n, 82 Wis. 2d 565, 263 N.W.2d 214 (1978) to support their contention that the statutory language is mandatory. In Karow, we set forth factors to consider when determining if a statutory provision is mandatory or directory, despite the legislature's use of the word "shall." The application of Karow is limited to cases where the disputed statutory language sets a time limitation for the taking of some action. See F.T. v. State, 150 Wis. 2d 216, 222-23, 441 N.W.2d 322 (Ct. App. 1989). In each of the cases where a Wisconsin court has applied Karow, "shall" was used to directly reference a statutory time limitation. See, e.g., State v. R.R.E., 162 Wis. 2d 698, 707, 470 N.W.2d 283 (1991); Eby v. Kozarek, 153 Wis. 2d 75, 79, 450 N.W.2d 249 (1990). In the present case, there is no dispute that the statutory language requiring a purchaser to submit payment within ten days of confirmation is mandatory. The dispute concerns whether the circuit court is bound by the language requiring forfeiture of the deposit and resale of the property. The purchasers' failure to comply with the time limitation triggers forfeiture and resale, yet the actual imposition of forfeiture and resale, which is the language preceded by "shall," is not set forth in relation to any time limitation. Therefore, we decline to apply Karow. 18 No. 17122.rtf the purchaser does not submit the balance of the purchase price within ten days of the confirmation of the sale. IV. ¶36 We next address whether the circuit court has the equitable authority to excuse a purchaser's non-compliance with the ten-day determination payment that the requirement, language notwithstanding of Wis. Stat. requiring forfeiture and resale, is mandatory. whether judicial authority exists is a § 846.17, The issue of question therefore one which this court reviews de novo. our of law and See Brier v. E.C., 130 Wis. 2d 376, 381, 387 N.W.2d 72 (1986). ¶37 the Foreclosure proceedings are equitable in nature, and circuit court has the equitable discretion throughout the proceedings. authority to exercise See Family Sav. & Loan Ass'n v. Barkwood Landscaping Co., Inc., 93 Wis. 2d 190, 202, 286 N.W.2d confirmation 581 (1980). of sale, This if discretion necessary to extends even provide "'that injustice shall be done to any of the parties.'" Strong v. Catton, 1 Wis. 408, 424 (1853)). after no Id. (quoting A circuit court has the "authority to grant equitable relief, even in the absence of a statutory right." Breier, 130 Wis. 2d at 388-89. Moreover, a circuit court's equitable authority may not be limited absent a "clear and valid" legislative command. State v. Excel Management Servs., 111 Wis. 2d 479, 490, 331 N.W.2d 312 (1983). ¶38 Thus, a This equitable authority is not unfettered, however. court's exercise of equitable authority is only appropriate when a legally protected right has been invaded. See 19 No. 17122.rtf Breier, 130 Wis. 2d at 389. Additionally, a court may not exercise its equitable authority if such exercise would ignore a statutory mandate. See First Federated Sav. Bank v. McDonah, 143 Wis. 2d 429, 434, 422 N.W.2d 113 (Ct. App. 1988). ¶39 We have already determined that the language of Wis. Stat. § 846.17, requiring forfeiture of a purchaser's deposit and resale of the property if the purchaser does not comply with the ten-day payment period, is mandatory. Therefore, the circuit court has no equitable authority to grant relief to a purchaser who fails to comply with the ten-day payment period set forth in Wis. Stat. § 846.17. See id. V. ¶40 with We the now consider statutory whether mandates of Cudd Wis. and Claycomb Stat. § complied 846.17. The application of a statute to a particular set of facts is a question of law and one which this court reviews de novo. See Kania v. Airborne Freight Corp., 99 Wis. 2d 746, 758, 300 N.W.2d 63 (1981). ¶41 We conclude that Cudd and Claycomb did comply with the requirements of Wis. Stat. § 846.17. on our determination that Wis. This decision is premised Stat. § 846.165 contemplates notice to the purchaser at a foreclosure sale of when the sale is confirmed, mortgagor's purchaser expire. of thereby redemption when the notifying period has ten-day time the purchaser ended period and for that the apprising the payment will Because Cudd and Claycomb did not receive proper notice of when the GMAC's redemption period ended and when the ten-day 20 No. 17122.rtf period for payment expired until June 5, 1996, there was no binding, effective confirmation of sale until that date. After the confirmation on June 5, 1996, Cudd and Claycomb complied with the requirements of Wis. Stat. § 846.17 by submitting the balance of the purchase price within the ten-day time period allowed. ¶42 be Wisconsin Statutes ch. 846 governs the procedures to followed language of in a ch. real estate foreclosure 846 convinces us proceeding. that the The legislature contemplated notice to purchasers of actions that may affect their rights and obligations with respect to confirmation of a foreclosure sale. Specifically, Wis. Stat. § 846.16513 states that before a foreclosure sale may be confirmed, all parties appearing in the action must be given at least five days notice of when the motion for confirmation of sale will be heard. ¶43 Although the purchaser is not necessarily a party appearing in the foreclosure action for purposes of the judgment and sale, "[t]he purchaser at the sale is a party interested in the proceedings to confirm the sale." Wis. 2d 164, 171, 325 N.W.2d 321 (1982). Shuput v. Lauer, 109 The purchaser is a "quasi-party in the action confirming the foreclosure sale and 13 Wis. Stat. § 846.165 states, in relevant part: Application for confirmation of sale and for deficiency judgment. (1) No sale on a judgment of mortgage foreclosure shall be confirmed unless 5 days' notice has been given to all parties that have appeared in the action. . . . the notice shall state, in addition to other matters required by law, the amount of the judgment, the amount realized upon the sale, the amount for which personal judgment will be sought against the several parties naming them, and the time and place of hearing. 21 No. 17122.rtf may appeal court orders affecting his or her rights with respect to the confirmation." Gumz v. Chickering, 19 Wis. 2d 625, 632, 121 N.W.2d 279 (1963). Accordingly, the purchaser is entitled to notice of the confirmation hearing. Land Contract See John S. Goodland, Mortgage and Foreclosures in Wisconsin § 9.02 (1989). The effect of providing notice to the purchaser is, in part, to inform the purchaser of the confirmation and thereby inform the purchaser of the expiration of the mortgagor's redemption rights and the dates encompassed in the purchaser's ten-day payment period. ¶44 Generally, foreclosure sale, stipulation or when a hearing confirmation otherwise. of is the Rather, held sale the is to confirm a not stayed by confirmation becomes effective immediately, and the order is entered at or following the hearing. In the standard scenario the purchaser has received notice of the confirmation hearing; the purchaser has been given an opportunity to be present at the hearing; the purchaser is aware that the sale is confirmed at or soon after the hearing; the purchaser is aware that the redemption period is over, and the balance of the purchase price must be submitted to the clerk of courts within ten days. ¶45 In the present case, Cudd and Claycomb were afforded the notice contemplated under Wis. Stat. § 846.165. the confirmation hearing on December 27, 1995, GMAC and not At the Gisvolds agreed, and the court approved, staying confirmation of the sale until January 15, 1996. Cudd and Claycomb apparently received notice of the confirmation hearing and, accordingly, Cudd was present at the hearing. 22 Cudd and Claycomb were No. 17122.rtf therefore apprised of the terms of the original in-court stipulation and court order, defining the date of confirmation of the sale, the expiration of the Gisvolds' redemption rights, and Cudd and Claycomb's right to purchase the property. ¶46 which Cudd and Claycomb received no notice of the events occurred after the confirmation hearing that affected their rights to the foreclosed property. Confirmation of the order in was stayed an additional two days accord with amended stipulation entered into between GMAC and Gisvold. an Cudd and Claycomb were not parties to this second stipulation, and there is no evidence in the record that Cudd and Claycomb were notified of the stipulation or amended order. and amended order did affect their rights The stipulation to purchase the property because all terms and conditions of the original order were extended an additional two days. stipulation provided the Gisvolds Consequently, because the an extended period for redemption, Cudd and Claycomb's right to purchase the property was delayed. Michael Gisvold's act of filing a Chapter 13 bankruptcy petition also affected Cudd and Claycomb's right to purchase the property because the bankruptcy filing extended the Gisvolds' redemption period. See 11 U.S.C. §§ 108, 362. Accordingly, Cudd and Claycomb were entitled to notice of these events insofar as they affected their right to complete the purchase of the property. ¶47 GMAC's motion to bring the matter before the circuit court for a determination of rights was the appropriate action to take as it provided notice to all parties appearing in the action of the events affecting their respective 23 property interests. No. 17122.rtf Furthermore, as mortgagee, GMAC was the bring such motion before the circuit court. appropriate party to Although all parties were affected by the confusing set of circumstances presented in this case, GMAC is the party initiating the foreclosure proceeding and arguably would have the greatest interest in a resolution of the proceedings so that the property debt could be satisfied, either by the mortgagor or the purchasers. ¶48 In response to GMAC's motion, the circuit court held hearings on May 3, 1996, and June 5, 1996. The hearings provided all parties, including Cudd and Claycomb, notice of the events surrounding the confirmation. Because Cudd and Claycomb did not receive the proper notice until that time, as is contemplated by Wis. Stat. § 846.165, there was no valid confirmation of sale until the June 5, 1996, hearing.14 ¶49 In its June 5, 1996, order, the circuit court approved and confirmed the foreclosure sale. The circuit court ordered that Cudd and Claycomb would have ten days from that date to submit the balance of the purchase price to complete the sale. In the event Cudd and Claycomb did not so comply, the court order indicated that their deposit would be forfeited and an action to initiate a new sale would commence. the payment to the clerk of Cudd and Claycomb submitted courts 14 within ten days of the We recognize that, generally, a mortgagor may redeem the property until a foreclosure sale is confirmed. See Gerhardt v. Ellis, 134 Wis. 191, 196 (1908). In the present case, our determination that the sale was not confirmed until June 5, 1996, does not extend the Gisvolds' redemption period. The Gisvolds' redemption period was defined pursuant to the terms of binding stipulations voluntarily entered into and incorporated into the circuit court's orders. See Wis. Stat. § 807.05. 24 No. 17122.rtf confirmation and, therefore, complied with the statutory provisions of Wis. Stat. § 846.17. VI. ¶50 Because we determine that Cudd and Claycomb completed their purchase of the foreclosed property in compliance with Wis. Stat. § 846.17, it is not necessary that we reach the issue whether Cudd and Claycomb forfeited their deposit. VII. ¶51 In sum, we conclude that the respondents failed to successfully redeem their property. We further conclude that the language of Wis. Stat. § 846.17 is mandatory insofar as it directs forfeiture of a purchaser's deposit and resale of the property in a foreclosure proceeding, if the purchaser does not submit the balance of the purchase price within ten days of the confirmation of the sale. Therefore, the circuit court has no equitable authority to waive a purchaser's non-compliance with the ten-day payment period set forth in Wis. Stat. § 846.17. We also conclude that Cudd and Claycomb have a right to notice of when the sale is confirmed, when the Gisvolds' redemption period ends, and when their ten-day payment contemplated by Wis. Stat. § 846.165. period expires, as Finally, we conclude that Cudd and Claycomb complied with the directives of Wis. Stat. § 846.17 by submitting the balance of the purchase price within ten days of the effective date of confirmation of the sale, which was June 5, 1996. 25 No. 17122.rtf By the Court. The decision reversed. 26 of the court of appeals is
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