Valerie Kennedy v. Ripco Credit Union

COURT OF APPEALS
DECISION NOTICE
DATED AND FILED This opinion is subject to further editing. If
published, the official version will appear in
the bound volume of the Official Reports.
March 16, 2021
A party may file with the Supreme Court a
Sheila T. Reiff petition to review an adverse decision by the
Clerk of Court of Appeals Court of Appeals. See WIS. STAT. § 808.10
and RULE 809.62.

Appeal No. 2019AP1619 Cir. Ct. No. 2018CV149

STATE OF WISCONSIN IN COURT OF APPEALS
DISTRICT III

VALERIE KENNEDY,

PLAINTIFF-APPELLANT,

V.

RIPCO CREDIT UNION,

DEFENDANT-RESPONDENT.

APPEAL from a judgment of the circuit court for Oneida County:
PATRICK F. O’MELIA, Judge. Affirmed.

Before Stark, P.J., Hruz and Seidl, JJ.

Per curiam opinions may not be cited in any court of this state as precedent

or authority, except for the limited purposes specified in WIS. STAT. RULE 809.23(3).

¶1 PER CURIAM. Valerie Kennedy appeals a summary judgment
dismissing her complaint against Ripco Credit Union. Kennedy argues that the
No. 2019AP1619

circuit court erred by rejecting her breach of contract claim and her claims under
the Wisconsin Consumer Act (“WCA”), WIS. STAT. chs. 421-427 (2019-20).1 For
the reasons discussed below, we affirm the judgment.

BACKGROUND

¶2 The underlying case stems from a 2013 small claims action in which
Ripco alleged Kennedy defaulted on two loans that were secured by three
vehicles. Although Kennedy was in default on her loans in an amount of nearly
$13,000, Ripco advanced a claim for a $10,000 money judgment plus costs—the
maximum amount generally allowed under the small claims statute for civil
claims—and a claim for replevin of the vehicles. On August 21, 2013, the circuit
court granted Ripco a default replevin judgment, and a default money judgment
against Kennedy in the amount of $10,190.85.

¶3 On December 15, 2014, the loan collateral was repossessed.
Kennedy’s complaint in this matter alleged that proceeds from the sale of
collateral, totaling $2,925, were applied to reduce her total loan balance due. The
complaint further claimed that as of the February 28, 2015 account statements, the
total amount remaining due for the loans was $5,913.10. There is no evidence in
the record of any subsequent payment on Kennedy’s loan balance.

¶4 On March 2, 2015, Kennedy moved to vacate the default judgments
based upon her claim that the service of process for the 2013 small claims
summons and complaint was improper, thus rendering the judgments void.

1
All references to the Wisconsin Statutes are to the 2019-20 version unless otherwise
noted.

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Kennedy also claimed that Ripco violated the WCA by taking possession of the
collateral through non-judicial recovery without a valid judgment, and by failing
to comply with the notice requirements of WIS. STAT. § 425.205(1g)(a). She
asserted that once the judgment was vacated, she would be in a position to seek
penalties for the WCA violations. The circuit court denied the motion to vacate
and, on appeal, we affirmed. Ripco Credit Union v. Kennedy, No. 2015AP1280,
unpublished slip op. ¶2 (WI App Feb. 23, 2016).

¶5 In January 2018, Kennedy filed a WIS. STAT. § 806.07(1)(g) motion
for relief from the judgment, seeking to vacate the $10,000 default money
judgment. Kennedy argued that the simultaneous entries of a replevin judgment
and a money judgment were improper because there could not be a money
judgment without first selling the collateral to establish a deficiency. The circuit
court denied Kennedy’s motion and her subsequent motion for reconsideration.
Kennedy did not appeal.

¶6 In June 2018, Kennedy filed the present lawsuit. Count I of her
complaint alleged a breach of contract based upon the underlying loan agreements
at issue in the 2013 small claims action. Kennedy also alleged multiple claims
under the WCA. The circuit court granted Ripco’s summary judgment motion and
dismissed all of Kennedy’s claims. It rejected the merits of her breach of contract
claim, and further determined that her remaining allegations were claim precluded.
This appeal follows.

DISCUSSION

¶7 This court reviews summary judgment decisions independently,
applying the same standards as the circuit court. Smith v. Dodgeville Mut. Ins.
Co., 212 Wis. 2d 226, 232, 568 N.W.2d 31 (Ct. App. 1997). Summary judgment

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is granted when there are no genuine issues of material fact and the moving party
is entitled to judgment as a matter of law. Green Spring Farms v. Kersten, 136
Wis. 2d 304, 315, 401 N.W.2d 816 (1987); see also WIS. STAT. § 802.08(2).

¶8 Kennedy first argues that the circuit court erred in dismissing
Count I of her complaint alleging that Ripco breached the loan agreements by
failing to apply proceeds from the sale of the collateral to the amounts owed on
both loans. As the court noted, Kennedy admitted that the collateral sale proceeds
had been applied to her loan balances. Nonetheless, it appears, that Kennedy
conflates her Ripco loan balances with Ripco’s default money judgment and,
based on that confusion, Kennedy asserts that Ripco breached the loan agreement
contracts by failing to apply the collateral proceeds to the default judgment.

¶9 We note that in making this argument, Kennedy refers to the default
money judgment as a deficiency judgment. This is not correct. At the time of the
entry of the original judgment, Ripco sought and obtained a replevin judgment and
a default money judgment. The latter is defined as “[a] judgment entered against a
defendant who has failed to plead or otherwise defend against the plaintiff’s
claim.” Default judgment, BLACK’S LAW DICTIONARY (11th ed. 2019). Ripco’s
default judgment is therefore separate and distinct from Kennedy’s current loan
balance, and nothing in the loan agreements required Ripco to satisfy the default
money judgment from the sale of collateral. Because the collateral proceeds were
applied to the loan balances, as required under the agreement, Kennedy fails to

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establish a breach of contract and the circuit court properly dismissed her breach
of contract claim.2

¶10 Kennedy further argues that the circuit court erred in dismissing her
WCA claims contained in Counts II to VIII of her complaint. As to Count II,
Kennedy claimed that pursuant to WIS. STAT. § 425.210 she is entitled to a
“declaratory” judgment determining the fair market value of the loan collateral
sold. Count III alleged that Ripco violated WIS. STAT. § 427.104(1)(j), which
prohibits a creditor from claiming, attempting or threatening to enforce a right
with knowledge or reason to know that the right does not exist. The basis for this
claim is Kennedy’s assertion that Ripco’s small claims complaint violated various
pleading requirements of the WCA. In addition, Kennedy argues that Ripco
violated other WCA provisions that required it to first obtain a replevin judgment,
then apply any collateral proceeds to the loan balance, and then obtain a money
judgment for any deficiency.

¶11 The remainder of the claims in Counts IV through VIII of Kennedy’s
complaint further alleged that the fair value of the collateral, rather than the actual
proceeds, should determine the amount of the deficiency judgment. Based on
these asserted errors, Kennedy claimed that the amount she actually owes Ripco
was inaccurately reported to credit agencies, and that she is entitled to a setoff,
revision of the judgment, statutory damages, and attorney’s fees. The circuit court
found the doctrine of claim preclusion applied to bar Kennedy’s claims. We
agree.

2
We note, however, that our holding does not authorize or endorse a double recovery to
Ripco. Under the loan agreements, Ripco cannot collect more than the balances due under the
loans less the collateral sale proceeds.

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¶12 Under the doctrine of claim preclusion, “a final judgment is
conclusive in all subsequent actions between the same parties [or their privies] as
to all matters which were litigated or which might have been litigated in the
former proceedings.” Northern States Power Co. v. Bugher, 189 Wis. 2d 541,
550, 525 N.W.2d 723 (1995) (citations omitted; emphasis added). In order for
earlier proceedings to act as a claim-preclusive bar, the following factors must be
present: (1) an identity between the parties or their privies in the prior and present
suits; (2) an identity between the causes of action in the two suits; and (3) a final
judgment on the merits in a court of competent jurisdiction. Id. at 551. Whether
claim preclusion applies under a given factual scenario is a question of law that
this court reviews de novo. Id.

¶13 This and Kennedy’s two prior lawsuits all involve the same two
parties—Kennedy and Ripco—and the default judgments were final judgments on
their merits in a court of competent jurisdiction. With respect to determining
whether there exists an identity between the causes of action in this and prior
lawsuits, Wisconsin has adopted a transactional approach in which “all claims
arising out of one transaction or factual situation are treated as being part of a
single cause of action, and they are required to be litigated together.” Parks v.
City of Madison, 171 Wis. 2d 730, 735, 492 N.W.2d 365 (Ct. App. 1992). Thus,
“if both suits arise from the same transaction, incident or factual situation, [claim
preclusion] generally will bar the second suit.” Northern States Power, 189
Wis. 2d at 554 (citations omitted).

¶14 Kennedy’s claims in the present lawsuit arise out of the same
transaction as those in the small claims lawsuit—i.e., the loan agreements between
Kennedy and Ripco, her default under those loans, and Ripco’s judgments
therefrom. Kennedy questions the circuit court’s authority to enter a default

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money judgment and default replevin judgment in the same small claims action
upon the loans at issue. This challenge to the default judgments could have been
raised had Kennedy appeared in the small claims action. Kennedy likewise could
have raised her derivative WCA claims in her two subsequent motions for relief
from and to vacate the default judgments, but she did not. Therefore, her claims
are precluded, and the court properly granted summary judgment in favor of
Ripco.3

By the Court.—Judgment affirmed.

This opinion will not be published. See WIS. STAT.
RULE 809.23(1)(b)5.

3
Because we conclude that Kennedy’s WCA claims are precluded, we need not address
Ripco’s alternative argument that the WCA claims were barred by the statute of limitations,
despite its merit. See Turner v. Taylor, 2003 WI App 256, ¶1 n.1, 268 Wis. 2d 628, 673 N.W.2d
716 (appellate courts need not address every issue raised by the parties when one is dispositive).

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