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Shank Hall, Inc. v. Horowitz

December 2, 2008

SHANK HALL, INC., PLAINTIFF-RESPONDENT,
v.
GARY HOROWITZ AND INVESTMENT TAX, INC., DEFENDANTS-APPELLANTS.
GUARANTY BANK & TRUST, GARNISHEE.
SHANK HALL, INC., PLAINTIFF-RESPONDENT,
v.
GARY HOWARD A/K/A GARY HOROWITZ AND INVESTMENT TAX, INC., DEFENDANTS-APPELLANTS.



APPEAL from orders of the circuit court for Milwaukee County: ELSA C. LAMLEAS AND MICHAEL G. MALMSTADT, Judges. Affirmed. Cir. Ct. Nos. 1996SC24199 & 2007CV4903.

The opinion of the court was delivered by: Kessler, J.

Before Curley, P.J., Fine and Kessler, JJ.

¶1 In these consolidated appeals, Gary Howard a/k/a Gary Horowitz and Investment Tax, Inc. (collectively, "Horowitz"), appeal from: (1) a non-earnings garnishment order directing that Horowitz's bank release $12,115.24 to Shank Hall, Inc., which has an unsatisfied small claims judgment against Horowitz, as well as an order denying Horowitz's motion to vacate and dismiss the underlying small claims judgment (appeal number 2007AP2341); and (2) an order denying Horowitz's motion for relief from the 1996 small claims judgment (appeal number 2008AP583).*fn1 We affirm.

BACKGROUND

¶2 On May 1, 2007, Shank Hall filed a non-earnings garnishment claim against Horowitz, pursuant to WIS. STAT. §§ 812.01-812.07 (2005-06).*fn2 Shank Hall claimed Horowitz owed it $12,115.24 (including post-judgment interest) pursuant to a 1996 small claims judgment.*fn3 Shank Hall sought to garnish the funds in Horowitz's Guaranty Bank & Trust bank account.

¶3 Shank Hall moved for summary judgment on its garnishment claim. Horowitz moved to dismiss the garnishment claim on a variety of grounds, including that the garnishment action should be dismissed because the 1996 judgment was void because the court lacked personal jurisdiction over Horowitz.

¶4 On August 6, 2007, the trial court heard arguments from the parties. Shank Hall argued that the judgment was unsatisfied, that the bank had indicated it held funds that could satisfy the judgment, and that the non-earnings garnishment should be ordered. Horowitz argued the garnishment action should be dismissed because he had not been properly served in the 1996 small claims action.

¶5 The trial court denied Horowitz's motion to vacate and dismiss, concluding that the motion was "not the appropriate vehicle by which to attack the small claims action that creates the underlying obligation." The trial court noted that the motion for summary judgment on the garnishment had not been opposed, and concluded that judgment in Shank Hall's favor was appropriate.

¶6 On August 13, 2007, Horowitz moved to stay the garnishment order pending appeal. The trial court denied the motion on August 21, 2007. It also issued the written garnishment order, as well as an order that explicitly denied Horowitz's motion to dismiss and granted Shank Hall's motion for summary judgment. It indicated that the garnishment order was "final for the purposes of an appeal." On October 4, 2007, Horowitz appealed from the orders approving the garnishment and denying Horowitz's motion to dismiss.*fn4 This became appeal number 2007AP2341.

¶7 On November 9, 2007, Horowitz moved for relief from judgment in small claims case number 96SC24199, citing WIS. STAT. § 806.07(1)(d) (authorizing relief where a judgment is void). The trial court held a hearing on Horowitz's motion.*fn5 Horowitz asserted that in 1996, Shank Hall had not exercised due diligence in its attempts to serve him. Specifically, he drew the court's attention to the process server's notes that concerned his attempts to serve Horowitz on August 3, 6 and 7, 1996, at his last known address of 500 W. Bradley Road. These notes stated: "Spoke w/ Receptionists at They laughed when I asked for def. Thev'e [sic] moved & they have new Alias. Marietta Weidenbaum goes by Marietta Aienseola & Gary goes by a New 1st name & New Spelling of old. He may be living in Apt. Cpx-White Oaks."*fn6 (Strike-through and abbreviations in original.) Horowitz presented affidavits at the motion hearing asserting that he did in fact live at an apartment complex known as White Oaks, located at 9100 N. White Oak Lane in Milwaukee, from 1995 until sometime in 2001. He argued that the process server had failed to exercise due diligence in attempting to serve him because the server did not pursue the lead that Horowitz might be living at an apartment complex called White Oaks. Horowitz contended that this lack of due diligence rendered the subsequent service by publication improper.

¶8 In response, Shank Hall argued that it had exercised due diligence in trying to serve Horowitz. It noted that Horowitz had an attorney representing him throughout the relevant time period. Shank Hall's counsel also asserted (without providing affidavits in support) that Horowitz and his attorney were aware of the 1996 lawsuit, and that Shank Hall tried unsuccessfully to locate Horowitz after judgment was entered, including going to an apartment complex called White Oaks Apartments. Finally, Shank Hall argued that the trial court could not grant Horowitz relief from judgment because WIS. STAT.§ 799.29(1)(c) (1995-96) limited the time to move for relief from judgment to six months.

¶9 The trial court concluded that Shank Hall had exercised due diligence in attempting to serve Horowitz in 1996. It noted that being told someone might be at "White Oaks" is not sufficient. It explained: "I don't know what White Oaks we're talking about. White Oaks, it's like how many pine lakes are there in Wisconsin, how many White Oaks Apartments developments are there. I don't know." It also noted that the server had been told Horowitz might be living "under his old [last] name with a different spelling and a new first name." The trial court said that under these circumstances, it was not reasonable to expect the server to continue to try to personally serve Horowitz. The court denied the motion for relief from judgment.

¶10 Horowitz appealed, which became appeal number 2008AP583. The two cases were subsequently consolidated for appeal.

DISCUSSION

¶11 Horowitz's opening brief on appeal raises numerous issues and subissues.*fn7 We have organized them into two main issues and will examine each in turn.

I. Challenges to the Garnishment Orders

¶12 A trial court "properly exercises its discretion when it examines the relevant facts, applies a proper standard of law, and, using a demonstrated rational process, reaches a conclusion that a reasonable court could reach." Flottmeyer v. Circuit Court for Monroe County, 2007 WI App 36, ¶17, 300 Wis. 2d 447, 730 N.W.2d 421. Horowitz argues the trial court that heard his motion to dismiss the garnishment action erroneously exercised its discretion in three ways: (1) it refused to consider Horowitz's challenge to the underlying small claims judgment; (2) it "erred in failing to consider [Horowitz's] argument that the garnishment was filed over 10 years after judgment was entered"; and (3) it failed to schedule a hearing date for and consider Horowitz's motion for reconsideration concerning the late filing of the garnishment action. We reject these arguments.

¶13 First, Horowitz argues that the trial court in the garnishment action should have considered his challenge to the underlying small claims judgment. Even if this were true (a proposition we do not decide), Horowitz fails to show how he was prejudiced, given that he was able to challenge whether the small claims judgment was void when he moved to vacate the small claims judgment and got a hearing on that motion. For this reason, we need not further consider Horowitz's challenge to the trial court's exercise of discretion concerning a hearing on this issue. See Hannemann v. Boyson, 2005 WI 94, ¶57, 282 Wis. 2d 664, 698 N.W.2d 714 ("An error does not require reversal unless it affects the substantial rights of the party seeking to set aside the judgment."); Gross v. Hoffman, 227 Wis. 296, 300, 277 N.W. 663 (1938) (unnecessary to decide non-dispositive issues).

¶14 Second, Horowitz argues the trial court "erred in failing to consider [his] argument that the garnishment was filed over 10 years after judgment was entered." The fact that the garnishment was filed ten years after judgment is a fact, not an argument. Horowitz's motion to dismiss the garnishment stated: "Per Wis. Stat. § 812.11(4), even if Defendant was properly served, Defendant argues Plaintiff did not assert his default judgment of $5,216 from the period of the award, October 2, 1996 until the service of garnishment, May 22, 2007. A period of ten years and 233 days." The section Horowitz referenced, § 812.11(4), provides: "The garnishee may state any claim of exemption from execution on the part of the defendant or other objection, known to the garnishee, against the right of the plaintiff to apply upon the plaintiff's demand the debt or property disclosed." Specifically how that section might apply to the garnishment action was not explained in the written motion or at the motion hearing. Horowitz offered no written or oral argument in opposition to Shank Hall's motion for summary judgment on the garnishment, which the trial court noted on the record. The trial court cannot be faulted for not considering an argument that was not made.

¶15 Horowitz's third challenge to the trial court's discretion is related to his second challenge, as it appears to involve the argument he wished he had raised before the garnishment order was issued. After the trial court granted summary judgment for Shank Hall and ordered the garnishment, Horowitz secured new counsel and moved for reconsideration, contesting the garnishment for the first time on grounds that the "garnishment action is procedurally defective because the limitation periods to enforce the 1996 small claims judgment, without renewal under [WIS. STAT.§ 806.23], had passed," and citing WIS. STAT.§§ 815.04 and 806.15(1). On appeal, Horowitz argues the merits of the reconsideration motion and contends the trial court erroneously denied him a hearing on his motion. However, the motion for reconsideration was never decided and was not referenced in Horowitz's notice of appeal. Issues arising from that motion are not part of this appeal and will not be addressed.

II. Challenges to the Underlying Small Claims Judgment

¶16 Horowitz argues that the trial court erroneously denied his motion for relief from the small claims judgment, which Horowitz brought on grounds that the judgment was void because Shank Hall did not exercise due diligence in trying to serve Horowitz in 1996. In response, Shank Hall argues there was due diligence, and also asserts that Horowitz's motion for relief from the default judgment is time-barred. We begin with Shank Hall's second argument.

A. Seeking Relief from the Default Judgment After Ten Years had Passed

¶17 As Shank Hall points out, relief from default judgments in small claims actions is governed by WIS. STAT. § 799.29. Although § 799.29(1)(a) permits a trial court to reopen default judgments, motions to reopen a default judgment (other than a default judgment entered in an ordinance violation matter) must now be brought "within 12 months after entry of judgment unless venue was improper." Sec. 799.29(1)(c).*fn8 When Shank Hall got its default judgment in 1996, however, motions seeking to reopen and vacate default judgments had to be made "within 6 months after entry of judgment unless venue was improper." Sec. 799.29(1)(c) (1995-96).*fn9

¶18 Horowitz did not challenge the default until 2007, well beyond the applicable six-month period, but contends the challenge is proper because a void judgment may be attacked at any time. See Neylan v. Vorwald, 124 Wis. 2d 85, 97, 368 N.W.2d 648 (1985) ("'When a court or other judicial body acts in excess of its jurisdiction, its orders or judgments are void and may be challenged at any time.'") (citation omitted); see also West v. West, 82 Wis. 2d 158, 166, 262 N.W.2d 87 (1978) ("A void judgment may be expunged by a court at any time. Where, as here, the claim is made that the judgment is void for want of personal jurisdiction, all that is needed is the determination that, in fact, jurisdiction was not acquired in the proceedings that led up to the entry of the judgment.") ("Laches is not a defense.").

¶19 Shank Hall does not directly attack the holdings in Neylan and West other than to point out the cases did not involve small claims default judgments. Noting that Horowitz brought his motion under WIS. STAT. § 806.07, Shank Hall contends that WIS. STAT. § 799.29(1)(c) and not § 806.07 governs as a result of the command in WIS. STAT. § 799.04(1) that "[e]xcept as otherwise provided in this chapter, the general rules of practice and procedure in chs. 750 to 758 and 801 to 847 shall apply to actions and proceedings under this chapter." (Emphasis added.) Thus, Shank Hall asserts that § 806.07(2)'s "reasonable time" requirement is trumped by the more specific limitation in § 799.29(1)(c).*fn10 See King v. Moore, 95 Wis. 2d 686, 689-90, 291 N.W.2d 304 (Ct. App. 1980) (The time set by the small claims statute within which a small claims defendant must make a motion to vacate a default judgment takes precedence over the time limit in § 806.07.).

¶20 Although this case raises the intriguing question of whether the holdings of Neylan and West apply to small claims actions, we conclude we need not decide that issue. See Hoffman, 227 Wis. at 300. Even if we assume that Horowitz could seek relief from the small claims judgment pursuant to WIS. STAT. § 806.07(1)(d), we affirm because we agree ...


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