from a judgment of the circuit court for Jefferson County No.
2016CV86 DAVID WAMBACH, Judge.
Lundsten, P.J., Sherman and Kloppenburg, JJ.
This case arises out of a foreclosure action initiated by
Bank of New York Mellon against Gloria and Steven Klomsten.
The circuit court granted summary judgment in favor of the
Bank. On appeal, the Klomstens challenge two rulings of the
circuit court: (1) the court's denial of the
Klomstens' motion to dismiss, and (2) the court's
granting of the Bank's motion for summary judgment. The
Klomstens argue that the circuit court should have granted
their motion to dismiss for either of the following reasons:
the action is barred by the six-year statute of limitations
in W . S . § 893.43 (2015-16), IS TAT  which applies to
breach of contract actions, or the complaint fails to state a
claim for relief because the Bank does not sufficiently
allege that it possesses the original note, which the Bank
must prove to prevail on its foreclosure claim. The Klomstens
argue that the circuit court erred in granting the Bank's
motion for summary judgment because the Bank's
submissions in support of summary judgment do not establish a
prima facie case that the Bank is the proper plaintiff in
this foreclosure action.
We reject both of the Klomstens' arguments relating to
the motion to dismiss. First, it is well established that the
running of the statute of limitations that applies to
enforcement of a note does not prevent timely foreclosure of
the mortgage that secures the note, and the Klomstens do not
cite any legal authority to the contrary or argue that this
action is otherwise untimely. Second, assuming without
deciding that the Bank must allege that it has possession or
the ability to possess the note, we conclude that the
complaint does not fail to state a claim because it can
reasonably be inferred from the allegations it contains,
along with the copies of the mortgage and note endorsed in
blank attached to the complaint, that the Bank is asserting
that it possesses, or has the ability to possess when needed,
the original note. Therefore, the complaint does not fail to
state a claim for the reason alleged by the Klomstens.
However, we agree with the Klomstens' argument as to the
motion for summary judgment. We conclude that the Bank's
submissions in support of summary judgment do not establish
each element of its prima facie case for this foreclosure
action because the Bank's submissions do not aver facts
showing that the Bank possesses the original note and,
therefore, that the Bank is a proper plaintiff in this
foreclosure action. Accordingly, we reverse and remand the
case for further proceedings.
The Bank filed this action in 2016, alleging that the
Klomstens failed to comply with the terms of a note and
mortgage executed by the Klomstens "by failing to pay
past due payments as required" as of June 2005, and
seeking a judgment of foreclosure. The Bank attached to its
complaint a copy of the note and mortgage it alleged the
Klomstens executed in 2003.
The Klomstens filed a motion to dismiss asserting that the
action is barred by Wis.Stat. § 893.43, the six-year
statute of limitations that applies to breach of contract
actions, and that the complaint fails to state a claim for
relief because the Bank does not sufficiently allege that it
possesses the original note. While the Klomstens' motion
was pending, the Bank filed a motion for summary judgment. In
support of its summary judgment motion, the Bank submitted
two affidavits, one from the Bank's attorney, who avers
primarily as to the attorney's fees and costs incurred by
the Bank in this action,  and one from Charlene Butler, an
employee of Shellpoint Mortgage Servicing, who avers that
Shellpoint is the servicer for the Bank "in relation to
the loan that is the subject of this litigation."
In opposition to the Bank's summary judgment motion, the
Klomstens submitted an affidavit in which Steven Klomsten
describes his dealings with various financial and servicing
entities regarding the note and mortgage.
The circuit court denied the Klomstens' motion to dismiss
and granted the Bank's motion for summary judgment,
"having determined that all material allegations are
true; that there is no debate as to the caselaw and that
applying the facts to the law, Summary Judgment is
appropriate." This appeal follows.
We will relate additional facts, particularly as to the
allegations in the complaint and the averments in the
affidavits, in the discussion that follows.
As stated, the Klomstens challenge the circuit court's
rulings denying their motion to dismiss and granting the
Bank's motion for summary judgment. We address each of
the rulings in turn.
The Klomstens' Motion to Dismiss
The Klomstens argue that the circuit court should have
granted the motion to dismiss for either of the following
reasons: the action is barred by the six-year statute of
limitations in Wis.Stat. § 893.43 or the complaint fails
to state a claim for relief because the Bank does not
sufficiently allege that it possesses the original note,
which the Bank must prove to prevail on its foreclosure
claim. As we explain, we reject each of the Klomstens'
Before we address the Klomstens' arguments, we first
dispense with the Bank's argument that the Klomstens were
required to seek an interlocutory appeal of the circuit
court's nonfinal order denying their motion to dismiss in
order to preserve the challenge to that order. Under
Wis.Stat. Rule 809.50(1), a party may file a
petition for leave of the court of appeals permitting appeal
of a nonfinal judgment or order that is not appealable as of
right within fourteen days after entry of the judgment or
order. The Bank cites no legal authority to support its
proposition that a party must do so to bring a
nonfinal ruling before the appellate court. Nor could the
Bank, because the law is to the contrary: "An appeal
from a final order brings before the appellate court all
prior nonfinal orders and rulings adverse to the appellant
and favorable to the respondent made in the action or
proceeding." Jacquart v. Jacquart, 183 Wis.2d
372, 380-81, 515 N.W.2d 539 (Ct. App. 1994); Wis.Stat. Rule
809.10(4). Therefore, the circuit court's nonfinal ruling
denying the Klomstens' motion to dismiss is properly
before us via the Klomstens' appeal from the court's
final ruling granting summary judgment in favor of the Bank.
Statute of Limitations
We are required to choose and apply the appropriate Wisconsin
statute of limitations to the Bank's claims to determine
whether they are time-barred. "Choosing the correct
statute of limitations involves a question of law that we
independently review." Zastrow v. Journal
Communications, Inc., 2006 WI 72, ¶12, 291 Wis.2d
426, 718 N.W.2d 51.
The Bank brought this foreclosure action eleven years after
the Klomstens stopped making payments. The Klomstens argue
that the circuit court should have dismissed this action
because it is barred by Wis.Stat. § 893.43(1), the
six-year statute of limitations that applies to breach of
contract actions, and which specifically applies to actions
"upon any contract, obligation, or liability." The
Bank concedes that the statute of limitations has
"expir[ed] on the note, " but argues that its
action to foreclose the mortgage is timely under Wis.Stat.
§ 893.33(2) and (5), the thirty-year statute of
limitations that applies to actions "affecting the
possession or title of any real estate" including
"all claims to an interest in real property."
In response to the Bank's argument, the Klomstens point
to Wis.Stat. § 893.33(4), which provides that the
thirty-year statute of limitations "does not extend the
right to commence any action or assert any defense or
counterclaim beyond the date at which the right would be
extinguished by any other statute." See City of
Prescott v. Holmgren, 2006 WI.App. 172, ¶9, 295
Wis.2d 627, 721 N.W.2d 153 (Wis. Stat. § 893.33 is a
"general real estate statute" that does not apply
where a more specific statute of limitations is shown to
apply). The Klomstens argue that the Bank's foreclosure
claim is "based upon a contract, obligation, and
liability that was expressly stated in a note and
mortgage"; that the note is inseparable from the
mortgage; that together they "form the complete
obligation of the parties to the mortgage contract"; ...