Title: Horizon Bank, National Ass’n v. Marshalls Point Retreat LLC

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2018 WI 19 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2016AP832 
COMPLETE TITLE: 
Horizon Bank, National Association, 
          Plaintiff-Appellant, 
     v. 
Marshalls Point Retreat LLC and Marshall's Point  
Association, Inc., 
          Defendants, 
Allen S. Musikantow, 
          Defendant-Respondent-Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
Reported at 373 Wis. 2d 767, 895 N.W.2d 855 
(2017 – Unpublished) 
 
 
OPINION FILED: 
March 6, 2018 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 7, 2017 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Door 
 
JUDGE: 
D. T. Ehlers 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
      
 
DISSENTED: 
R.G. BRADLEY, J. dissents (opinion filed). 
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
 
For the defendant-respondent-petitioner, there were briefs 
filed by James E. Goldschmidt, Donald K. Schott, and Quarles & 
Brady LLP, Madison and Milwaukee.  There was an oral argument by 
Donald K. Schott. 
 
For the plaintiff-appellant, there was a brief filed by 
Melinda A. Bialzik, Samuel C. Wisotzkey, and Kohner, Mann & 
Kailas, S.C., Milwaukee.  There was an oral argument by Melinda 
A. Bialzik. 
 
 
 
2 
An amicus curiae brief was filed on behalf of Wisconsin 
Bankers Association by Kirsten E. Spira, John E. Knight, and 
Boardman & Clark LLP, Madison. 
 
 
2018 WI 19
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No.  2016AP832 
(L.C. No. 
2015CV125) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Horizon Bank, National Association, 
 
          Plaintiff-Appellant, 
 
     v. 
 
Marshalls Point Retreat LLC and Marshall's 
Point Association, Inc., 
 
          Defendants, 
 
Allen S. Musikantow, 
 
          Defendant-Respondent-Petitioner. 
 
FILED 
 
MAR 6, 2018 
 
Sheila T. Reiff 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded. 
 
¶1 
ANN WALSH BRADLEY, J.   The petitioner, Allen S. 
Musikantow (Musikantow), seeks review of an unpublished per 
curiam decision of the court of appeals directing that the 
circuit court apply a credit of $2,250,000 to a money judgment 
No. 
2016AP832 
 
2 
 
entered against Musikantow as guarantor of a loan.1  Musikantow 
contends that the court of appeals erred by limiting the credit 
to the amount of the winning bid at the sheriff's sale thereby 
precluding the circuit court from hearing evidence of the fair 
value of the property after the confirmation of sale. 
¶2 
Specifically, Musikantow contends that Wis. Stat. 
§ 846.165 (2015-16)2 does not require a circuit court to make a 
determination of a guaranty credit at the time the foreclosure 
sale is confirmed.  He further argues that circuit courts have 
                                                 
1 Horizon Bank, Nat'l Ass'n v. Marshalls Point Retreat LLC, 
No. 2016AP832, unpublished slip op., (Wis. Ct. App. Jan. 24, 
2017) (per curiam) (reversing order of circuit court for Door 
County, D.T. Ehlers, Judge). 
2 Wis. Stat. § 846.165 provides in relevant part: 
(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. . . . and the notice shall state, in addition 
to other matter 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. 
(2) In case the mortgaged premises sell for less than 
the amount due and to become due on the mortgage debt 
and costs of sale, there shall be no presumption that 
such premises sold for their fair value and no sale 
shall 
be 
confirmed 
and 
judgment 
for 
deficiency 
rendered, until the court is satisfied that the fair 
value of the premises sold has been credited on the 
mortgage debt, interest and costs (emphasis added). 
All subsequent references to the Wisconsin statutes 
are to the 2015-16 version unless otherwise indicated. 
No. 
2016AP832 
 
3 
 
the 
discretion 
to 
decouple 
guaranty-related 
rulings 
from 
underlying foreclosure sales. 
¶3 
We conclude that Wis. Stat. § 846.165 does not apply 
to credits toward a judgment on a guaranty.  Rather, it applies 
to the relationship between only the mortgagee and mortgagor who 
signed the promissory note underlying the mortgage.  It 
therefore cannot serve as authority for the proposition that, 
when confirming a foreclosure sale, a circuit court must 
determine the amount of a credit to be applied to a judgment on 
a guaranty. 
¶4 
Further, 
we 
conclude 
that 
when 
an 
action 
for 
foreclosure against a mortgagor and an action for a money 
judgment on a guaranty are brought in the same proceeding as in 
the instant case, the circuit court may, in its discretion, 
decide the amount of a credit to be applied to a judgment on a 
guaranty either at the time the sale is confirmed or at another 
time.  The questions of fair value for purposes of Wis. Stat. 
§ 846.165 and the amount of any credit toward the judgment on 
the guaranty are separate questions.  Thus, the circuit court 
did not erroneously exercise its discretion when it decoupled 
the confirmation of sale from the determination of the guaranty 
credit. 
¶5 
Finally, we determine that the stipulation in this 
case does not establish that the amount of the winning bid at 
the sheriff's sale shall be the sole credit toward the money 
judgment against Musikantow. 
No. 
2016AP832 
 
4 
 
¶6 
Accordingly, we reverse the decision of the court of 
appeals and remand to the circuit court for further proceedings 
to determine the amount of the credit to be applied toward the 
judgment against Musikantow as guarantor. 
I 
¶7 
Horizon Bank, National Association (Horizon Bank) 
loaned $5 million to Marshalls Point Retreat LLC (Marshalls 
Point), secured by a mortgage on property located in Sister Bay.3  
Musikantow, a member of Marshalls Point, signed a continuing 
guaranty of payment for the loan. 
¶8 
Alleging that Marshalls Point had defaulted on the 
loan, Horizon Bank brought a foreclosure action.  In the same 
action, Horizon Bank also brought a claim for a money judgment 
against Musikantow pursuant to the terms of the guaranty. 
¶9 
The parties stipulated to the entry of judgment on 
both of Horizon Bank's claims.  The stipulation contained an 
order for judgment, which the circuit court signed.  A judgment 
for foreclosure was entered against Marshalls Point and a money 
judgment was entered against Musikantow as guarantor for 
$4,045,555.55, the amount of principal and interest remaining on 
the loan. 
                                                 
3 The property at issue is an 8,738 square foot house 
situated on 21.20 acres with 797 feet of frontage along Lake 
Michigan. 
No. 
2016AP832 
 
5 
 
¶10 In addition, the stipulation provided that the Sister 
Bay property may be sold at a sheriff's sale.  It further stated 
that: 
[t]he amount paid to [Horizon Bank] from the proceeds 
of 
said 
sale 
of 
the 
Premises, 
remaining 
after 
deduction by [Horizon Bank] of the amount of interest, 
fees, costs, expenses, disbursements and other charges 
paid or incurred by [Horizon Bank] not included in the 
monetary judgment against [Musikantow] (set forth 
below) shall be credited by [Horizon Bank] as payment 
on said monetary judgment. 
¶11 At the sheriff's sale, Horizon Bank bought the Sister 
Bay property for a credit bid of $2,250,000.  The sole bid was 
from Horizon Bank. 
¶12 Horizon Bank moved the circuit court to confirm the 
sale pursuant to Wis. Stat. § 846.165, arguing that the amount 
of its bid at the sheriff's sale constituted "fair value" of the 
Sister Bay property.4  In support of its determination of fair 
value, Horizon Bank submitted two expert witness affidavits. 
¶13 Additionally, Horizon Bank indicated in its motion to 
confirm the sale that it would not seek a deficiency judgment 
                                                 
4 See Wis. Stat. § 846.165(2) ("In case the mortgaged 
premises sell for less than the amount due and to become due on 
the mortgage debt and costs of sale, there shall be no 
presumption that such premises sold for their fair value and no 
sale shall be confirmed and judgment for deficiency rendered, 
until the court is satisfied that the fair value of the premises 
sold has been credited on the mortgage debt, interest and 
costs"). 
No. 
2016AP832 
 
6 
 
against Marshalls Point.5  Finally, it requested that the circuit 
court apply the amount of the winning bid at the sheriff's sale 
as a credit toward the judgment against Musikantow, thereby 
reducing the amount of the money judgment by that amount. 
¶14 In response to the motion to confirm the sale, 
Marshalls Point and Musikantow "recognize[d] that the court must 
find that the amount bid at sale represents fair value, even 
though the mortgagee did not seek a deficiency judgment against 
the mortgagor."  They also conceded that "[f]air value is not 
the same as fair market value." 
¶15 Thus, Marshalls Point and Musikantow did not object to 
the confirmation of sale at the price of Horizon Bank's winning 
bid at the sheriff's sale on the condition that certain language 
be added to the order confirming the sale.  They sought language 
to protect Musikantow from being bound to the amount of the 
winning bid as the amount of the credit: 
Notwithstanding 
anything 
in 
this 
order, 
the 
confirmation of the sale of the collateral to Horizon 
Bank, following a deficiency against the borrower, 
shall have no collateral estoppel or res judicata 
effect should Horizon Bank seek to recover against the 
guarantor, Allen S. Musikantow, on all or any part of 
the judgment against Allen S. Musikantow as guarantor 
of this obligation. 
                                                 
5 A waiver of a deficiency judgment against Marshalls Point 
does not preclude Horizon Bank from seeking payment from 
Musikantow.  Indeed, a deficiency judgment cannot be granted 
against a guarantor because the guarantor's debt is pursuant to 
a contract apart from the promissory note.  Stellmacher v. Union 
Mortg. Loan Co., 195 Wis. 635, 637, 219 N.W. 343 (1928). 
No. 
2016AP832 
 
7 
 
¶16 Marshalls Point and Musikantow further indicated that, 
if the requested language was not inserted into the order, they 
would object "not to the confirmation of the sale itself, but to 
the 
amount 
to 
be 
credited 
upon 
the 
judgment 
against 
[Musikantow]."  They asserted that the Sister Bay property had a 
fair market value far in excess of the $2,250,000 winning bid, 
arguing that the actual value of the property exceeded $10 
million. 
¶17 The circuit court held a hearing on the motion to 
confirm the sale.  Marshalls Point and Musikantow reiterated 
their desire for additional language in the order as reflected 
above.  See supra, ¶15.  Their counsel stated, "We don't oppose 
confirmation of sale in and of itself at that price.  What we 
oppose is a finding of the value which would be binding on the 
guarantor." 
¶18 Additionally, 
counsel 
for 
Marshalls 
Point 
and 
Musikantow indicated that a witness was present in the courtroom 
who would testify that the Sister Bay property had a market 
value exceeding $10 million.  The circuit court adjourned and 
rescheduled the hearing and the witness never testified. 
¶19 At the next scheduled hearing, counsel for Marshalls 
Point and Musikantow asserted that there was "a great deal of 
testimony" that could be presented about the property's market 
value.  However, counsel did not offer this testimony based on 
the belief "that it's really not necessary that we make an 
evidentiary finding with respect to the value to be placed upon 
the residence[.]" 
No. 
2016AP832 
 
8 
 
¶20 Rather, counsel observed that the guaranty Musikantow 
signed contained a governing law provision.  This provision 
stated that the guaranty "will be governed by federal law 
applicable to lender and to the extent not preempted by federal 
law, the laws of the State of Indiana without regard to its 
conflicts of law provisions."  Counsel expressed his view that 
"it's clearly not a Wisconsin case in terms of the substantive 
law.  It is, however, in Wisconsin for procedural issues dealing 
with the foreclosure." 
¶21 Additionally, counsel indicated that Horizon Bank had 
already filed a federal lawsuit in Florida, where Musikantow 
resided, for the purpose of "authenticating" the judgment 
against him.  He argued that "what we're doing is we're going 
above and beyond what's required in Wisconsin procedural law to 
decide an issue that's . . . more likely to be litigated in the 
State of Florida as to the value to be credited for that 
property." 
¶22 In response, Horizon Bank explained that "[t]he 
federal action is a domestication of the money judgment that 
this [c]ourt has already entered on the guarant[y] in these 
proceedings."  Horizon Bank further asserted, "The judgment has 
been entered.  He was personally served.  He was under the 
jurisdiction of the [c]ourt.  The [c]ourt entered a money 
judgment.  Those issues are done."  Thus, it requested that the 
circuit 
court 
confirm 
the 
sheriff's 
sale 
and 
apply 
the 
$2,250,000 proceeds from the sheriff's sale as "the only number 
that can be credited to the judgment." 
No. 
2016AP832 
 
9 
 
¶23 The circuit court granted Horizon Bank's motion to 
confirm the sale.  It further found "that a bid price of 2.25 
million dollars represents fair and reasonable value for the 
property."  However, the circuit court declined to rule on the 
credit to be applied toward the judgment against Musikantow as 
guarantor. 
¶24 In declining to rule on the amount of the credit, the 
circuit court expressed its belief that because of the governing 
law provision, the Florida district court would determine the 
amount of the credit.6  The circuit court stated: 
I guess if the federal courts kick this back to me to 
make a decision [about] what is to be the appropriate 
credit under the commercial guarant[y], well, then 
we'll have a hearing and I'll make that decision.  But 
I'm not going to preempt federal law at this point. 
Maybe the federal courts are going to kick it back 
here.  Maybe they're going to kick it back to Indiana.  
I don't know whether they're going to kick it back.  
If it's kicked back here, then I'll deal with 
it. . . .  
[T]his is a federal issue and I'm not going to deal 
with it today. 
¶25 Accordingly, the circuit court entered an order 
confirming the sale.  Consistent with its determination to leave 
the calculation of Musikantow's credit for another day, it 
                                                 
6 The circuit court's belief in this regard was incorrect.  
Horizon Bank later filed a motion to dismiss the Florida action, 
which was granted.  The amount of the credit was never 
determined by the Florida court. 
No. 
2016AP832 
 
10 
 
crossed out the final paragraph of the proposed order, which set 
forth: 
After application to the Judgment indebtedness of the 
amount bid at sheriff's sale of $2,250,000, there 
remains due under the Judgment entered against Allen 
S. Musikantow the sum of $1,869,460.70, as of November 
4, 2015, together with subsequently accruing interest, 
fees and costs. 
¶26 A month later, the circuit court entered another 
order.  "[I]n light of the language in the Guaranty document 
indicating that it is to be governed by Federal Law[,]" the 
circuit court stated that it would "decline to make a finding of 
the amount to be credited against the judgment of Horizon Bank 
[] against [] Musikantow as guarantor."  The court advised it 
would, "if requested by a Federal Court, make a determination as 
to such amount to be credited against the judgment of Horizon 
Bank [] against [] Musikantow." 
¶27 Horizon Bank appealed the second order.  On appeal, 
Horizon Bank argued that the stipulation between the parties 
controlled the amount of the credit to be applied toward the 
judgment.  The court of appeals agreed, reversing the circuit 
court and remanding with the direction to amend the money 
judgment against Musikantow by applying a sole credit of 
$2,250,000.  Horizon Bank, Nat'l Ass'n v. Marshalls Point 
Retreat LLC, No. 2016AP832, unpublished slip op., ¶25 (Wis. Ct. 
App. Jan. 24, 2017) (per curiam). 
II 
¶28 This 
case 
requires 
us 
to 
interpret 
Wis. 
Stat. 
§ 846.165.  Statutory interpretation is a question of law we 
No. 
2016AP832 
 
11 
 
review independently of the determinations of the circuit court 
and court of appeals.  GMAC Mortg. Corp. v. Gisvold, 215 
Wis. 2d 459, ¶29, 572 N.W.2d 466 (1998). 
¶29 We are also asked to address whether the circuit court 
erroneously exercised its discretion when it decoupled the 
guaranty-related 
credit 
determination 
from 
the 
underlying 
foreclosure action.  This court will uphold the discretionary 
decision of a circuit court as long as the circuit court's 
exercise of discretion was not erroneous.  Hull v. State Farm 
Mut. Auto. Ins. Co., 222 Wis. 2d 627, ¶11, 586 N.W.2d 863 
(1998).  An exercise of discretion is erroneous if it is based 
on an error of fact or law.  Zarder v. Humana Ins. Co., 2010 WI 
35, ¶21, 324 Wis. 2d 325, 782 N.W.2d 682. 
¶30 Finally, we construe the stipulation between the 
parties.  The interpretation of a stipulation is also a question 
of law we review independently of the determinations of the 
circuit court and court of appeals.  Stone v. Acuity, 2008 WI 
30, ¶21, 308 Wis. 2d 558, 747 N.W.2d 149. 
III 
¶31 The court of appeals based its determination on the 
language 
of 
the 
stipulation 
and 
its 
understanding 
that 
Musikantow had conceded fair value.  Nevertheless, to provide 
context we begin our analysis by examining the statutory 
procedure for confirmation of sale set forth in Wis. Stat. 
§ 846.165.  Subsequently, we address the circuit court's 
discretion to set forth the procedure when foreclosure and a 
money judgment on a guaranty are brought in the same proceeding.  
No. 
2016AP832 
 
12 
 
Finally, we consider the stipulation of the parties and its 
effect on the amount to be credited. 
A 
¶32 Wisconsin Stat. § 846.165 governs the procedure for 
confirming a sheriff's sale of a foreclosed property.  At issue 
here is sub. (2), which provides: 
In case the mortgaged premises sell for less than the 
amount due and to become due on the mortgage debt and 
costs of sale, there shall be no presumption that such 
premises sold for their fair value and no sale shall 
be confirmed and judgment for deficiency rendered, 
until the court is satisfied that the fair value of 
the premises sold has been credited on the mortgage 
debt, interest and costs. 
¶33 Statutory interpretation begins with the language of 
the statute.  State ex rel. Kalal v. Cir. Ct. for Dane Cty., 
2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 110.  If the 
meaning of the statute is plain, we need not further the 
inquiry.  Id. 
¶34 The 
plain 
language 
of 
Wis. 
Stat. 
§ 846.165(2) 
indicates that it does not apply to a judgment obtained against 
a third-party guarantor.  It states that confirmation of sale 
cannot occur until the circuit court "is satisfied that the fair 
value of the premises sold has been credited on the mortgage 
debt, interest and costs."  § 846.165(2) (emphasis added).  
Thus, the statute relates to the relationship between only the 
mortgagee 
and 
mortgagor 
who 
signed 
the 
promissory 
note 
underlying the mortgage.  The "mortgage debt" referenced in the 
No. 
2016AP832 
 
13 
 
statute is not the same as the debt stemming from a third-party 
guaranty. 
¶35 A guarantor's liability arises not from the debt 
itself, but from a separate guaranty contract.  Bank Mut. v. 
S.J. Boyer Const., Inc., 2010 WI 74, ¶53, 326 Wis. 2d 521, 785 
N.W.2d 462.  "Therefore, although guarantors of payment are 
personally liable for some amount according to the terms of 
their guaranty contract, they are not personally liable for the 
debt secured by the mortgage."  Id. 
¶36 Because the plain language of Wis. Stat. § 846.165(2) 
is unambiguous, we need not pursue further inquiry.  Kalal, 271 
Wis. 2d 633, ¶45.  We therefore conclude that § 846.165(2) does 
not apply to credits toward a judgment on a guaranty.  Rather, 
it applies to the relationship between only the mortgagee and 
mortgagor 
who 
signed 
the 
promissory 
note 
underlying 
the 
mortgage.  Accordingly, it cannot serve as authority for the 
proposition that, when confirming a foreclosure sale, a circuit 
No. 
2016AP832 
 
14 
 
court must also determine the amount of a credit to be applied 
to a judgment on a guaranty.7 
B 
¶37 Our conclusion that Wis. Stat. § 846.165 applies to 
the relationship between only the mortgagee and the debt 
underlying the mortgage highlights the divergent tracks mortgage 
related determinations and guaranty related determinations may 
take.  For example, the question of fair value for purposes of 
confirming the sheriff's sale pursuant to § 846.165 presents a 
different question than that of the credit a guarantor receives 
when the subject property transfers by means of a foreclosure 
and sale. 
¶38 Those 
two 
questions 
are 
decided 
under 
separate 
standards.  A determination that the amount of proceeds at a 
sheriff's sale constitutes "fair value" is subject to a "shock 
the conscience" standard.  See Bank of New York v. Mills, 2004 
WI App 60, ¶18, 270 Wis. 2d 790, 678 N.W.2d 332.  "The 
                                                 
7 Horizon Bank's position that a circuit court must 
determine the amount of a credit to be applied to a judgment on 
a guaranty during a hearing to confirm a foreclosure sale raises 
significant due process concerns.  There is no statutory 
requirement that a guarantor receive notice of the confirmation 
hearing.  Wisconsin Stat. § 846.165(1) requires notice "to all 
parties that have appeared in the action."  Because a mortgagee 
can pursue foreclosure without ever joining the guarantor, the 
guarantor may never appear in the action and consequently may 
not receive notice of the hearing.  Without statutorily-required 
notice, guarantors can be deprived of the ability to challenge 
the fair value of the property and thus be saddled with a credit 
amount they did not have the opportunity to contest. 
No. 
2016AP832 
 
15 
 
determination of 'fair value' identifies whether the price 
shocks the conscience of the court."  Id. 
¶39 In contrast, the amount of a credit to be due on a 
guaranty is strictly a matter of contract.  "A guarantor's 
liability depends upon the particular terms of his or her 
engagement."  Crown Life Ins. Co. v. LaBonte, 111 Wis. 2d 26, 
32, 330 N.W.2d 201 (1983) (citing Continental Bank & Trust Co. 
v. Akwa, 58 Wis. 2d 376, 388, 206 N.W.2d 174 (1973)). 
¶40 Further reflecting that fair value in the context of 
Wis. Stat. § 846.165 and the credit due on a guaranty are 
separate issues, the amount of a credit to be applied to a 
guaranty may be litigated in an action wholly apart from the 
fair value contemplated by § 846.165. 
¶41 The procedure followed in Crown Life, 111 Wis. 2d 26, 
is instructive here.  Crown Life involved an action to collect 
on a contractual guaranty of a note after the mortgage that 
secured the debt had proceeded through foreclosure and sale and 
the lender had not received full payment.  Id. at 30-31. 
¶42 Although Musikantow, unlike the guarantor in Crown 
Life, was a party to the foreclosure action here, Crown Life 
demonstrates that the debt due under the mortgage and under the 
guaranty may properly follow separate tracks.  See id.  The two 
determinations need not even be part of the same action, and 
thus need not be made at the same time. 
¶43 Our conclusion is consistent with Crown Life and with 
the equitable nature of foreclosure proceedings.  As Crown Life 
illustrates, a foreclosure action against a mortgagor and a 
No. 
2016AP832 
 
16 
 
related action for money judgment on a guaranty can proceed 
together or separately.  If a lender chooses to bring the two 
actions together, as was the case here, the circuit court has 
discretion in deciding how to most fairly determine the separate 
issues of (1) fair value for purposes of confirming the sale and 
(2) the credit to be applied to the judgment against the 
guarantor.  The circuit court has the discretion to decide these 
issues at the same time or separately. 
¶44 "Foreclosure proceedings are equitable in nature, and 
the circuit court has the equitable authority to exercise 
discretion throughout the proceedings."  Walworth State Bank v. 
Abbey Springs Condominium Ass'n, Inc., 2016 WI 30, ¶24, 368 
Wis. 2d 72, 878 N.W.2d 170 (quoting GMAC Mortg. Corp., 215 
Wis. 2d 459, ¶37).  In the circuit court's discretion, it could 
be fair to speedily confirm the sale when there will be no 
deficiency judgment against the mortgagor, while leaving the 
determination of the credit toward the guaranty for another day.8 
¶45 As Musikantow suggested at oral argument, specific 
characteristics of the subject property, in addition to other 
concerns, may play a role in a circuit court's determination of 
what is equitable under the circumstances.  Because the circuit 
court could properly decouple the guaranty and foreclosure sale 
                                                 
8 Admittedly, an action based on a guaranty is a matter of 
contract and not equity.  Nevertheless, because the actions were 
brought together, the exercise of the circuit court's equitable 
powers in the foreclosure proceeding can affect the action on 
the guaranty. 
No. 
2016AP832 
 
17 
 
proceedings, its decision to do so was not an error of fact or 
law and thus its exercise of discretion was not erroneous.9 
¶46 We 
therefore 
conclude 
that 
when 
an 
action 
for 
foreclosure against a mortgagor and an action for a money 
judgment on a guaranty are brought in the same proceeding as in 
this case, the circuit court may, in its discretion, decide the 
separate questions of fair value for purposes of Wis. Stat. 
§ 846.165 and the amount of any credit toward the judgment on 
the guaranty either at the same time or separately. 
C 
¶47 Having determined that Wis. Stat. § 846.165 does not 
apply and that the circuit court was within its discretion to 
allow the case to proceed on two separate tracks, we examine 
next the interpretation of the stipulation between the parties.  
The central question is whether the stipulation requires the 
$2,250,000 credit to be applied as the sole credit toward the 
guaranty. 
¶48 All parties to this case entered into a stipulation, 
which the circuit court formalized through the issuance of an 
order.  At issue here is paragraph 11 of the stipulation, which 
states: 
                                                 
9 Although the circuit court's belief that the Florida court 
would decide the amount of the credit was ultimately incorrect, 
the circuit court was within its discretion to leave open the 
possibility of later deciding the amount of the credit itself.  
As explained above, such a decoupling of the confirmation of 
sale and the credit determination is within the circuit court's 
discretion. 
No. 
2016AP832 
 
18 
 
The amount paid to [Horizon Bank] from the proceeds of 
said sale of the Premises, remaining after deduction 
by [Horizon Bank] of the amount of interest, fees, 
costs, expenses, disbursements and other charges paid 
or incurred by [Horizon Bank] not included in the 
monetary judgment against [Musikantow] (set forth 
below) shall be credited by [Horizon Bank] as payment 
on said monetary judgment. 
¶49 The court of appeals found paragraph 11 of the 
stipulation to be clear and dispositive.  In concluding that the 
stipulation controls the amount of the credit to be applied 
toward the judgment against Musikantow, the court of appeals 
stated: 
Musikantow conceded in the circuit court that the bid 
price of $2,250,000 represented the fair value of the 
subject property, and he does not argue otherwise on 
appeal.  The circuit court expressly found that the 
bid represented the property's fair value, and it 
therefore 
confirmed 
the 
sheriff's 
sale. 
 
Upon 
confirmation of sale, title to the property was 
transferred to Horizon Bank, and the bank therefore 
received 'proceeds of said sale' worth $2,250,000.  
Accordingly, based on the parties' stipulation and the 
judgment entered according to its terms, the court 
should have applied a $2,250,000 credit toward the 
judgment against Musikantow. 
Horizon Bank, Nat'l Ass'n, No. 2016AP832, unpublished slip op., 
¶23. 
¶50 The court of appeals misinterpreted the exclusive and 
determinative 
nature 
of 
the 
stipulation. 
 
Although 
the 
stipulation mandates that the amount of the winning bid at the 
sheriff's sale be credited on the judgment against Musikantow, 
it does not state that it must be the exclusive credit to be 
granted toward the judgment. 
No. 
2016AP832 
 
19 
 
¶51 Contract interpretation generally seeks to give effect 
to the intentions of the parties.  Tufail v. Midwest Hosp., LLC, 
2013 WI 62, ¶25, 348 Wis. 2d 631, 833 N.W.2d 586 (citing 
Seitzinger v. Cmty. Health Network, 2004 WI 28, ¶22, 270 
Wis. 2d 1, 676 N.W.2d 426).  However, subjective intent is not 
the be-all and end-all of contract interpretation.  Id., ¶25 
(citing Kernz v. J.L. French Corp., 2003 WI App 140, ¶9, 266 
Wis. 2d 124, 667 N.W.2d 751).  Rather, unambiguous contract 
language controls the interpretation of contracts.  Id.  This 
court construes contracts as they are written.  Id., ¶29. 
¶52 The court of appeals implicitly concluded that the 
language in paragraph 11 of the stipulation was unambiguous.  It 
determined that the stipulation provides for the "proceeds of 
the sale," and only the "proceeds of the sale," to be applied as 
a credit toward the judgment against the guarantor.  See Horizon 
Bank, Nat'l Ass'n, No. 2016AP832, unpublished slip op., ¶24 
("the parties' stipulation requires a $2,250,000 credit toward 
the money judgment") (emphasis added). 
¶53 Upon our independent review of the stipulation, we 
find it ambiguous as to the amount of the total credit.  The 
operative portion of the stipulation provides that the proceeds 
of the sheriff's sale "shall be credited by [Horizon Bank] as 
payment on said monetary judgment" against Musikantow.  It does 
No. 
2016AP832 
 
20 
 
not say that the proceeds of the sheriff's sale shall be the 
sole credit toward the judgment against Musikantow.10 
¶54 The stipulation prescribes what must be done, but it 
does not describe that the amount is the totality of the credit.  
Hence, the stipulation provides a "floor" for the amount of the 
credit, but not a "ceiling."11 
¶55 Additionally, we observe that Musikantow declined to 
present evidence as to the value of the property with the 
expectation that he would be able to later contest the amount of 
the credit.  The record undermines the court of appeals' 
                                                 
10 The dissent's concern about dire consequences occasioned 
by the majority opinion misses an essential point.  See dissent, 
¶¶91 n.9, 92.  It ignores that our conclusion is based on the 
interpretation of the particular stipulation at issue here.  
Contrary to the dissent's assertion, our determination does not 
upset the parties' reasonable expectations.  Conversely, our 
decision should serve to drive banks and guarantors to write 
clearer stipulations that unambiguously reflect their intentions 
if they truly intend to resolve the full credit amount by 
stipulation. 
11 Contrary to the suggestion of the dissent, McFarland 
State Bank v. Sherry, 2012 WI App 4, 338 Wis. 2d 462, 809 
N.W.2d 58, 
does 
not 
control 
the 
interpretation 
of 
the 
stipulation.  First, the McFarland State Bank court did not 
interpret contract language like that at issue here.  Second, 
the lender in McFarland State Bank argued that the guarantor 
should receive a credit less than the fair value amount 
determined at the confirmation of sale.  Id., ¶¶29-30. 
The court of appeals rejected this argument, but did not 
conclude that a guarantor's credit must always be equal to the 
circuit court's fair value determination at the confirmation of 
sale.  This is entirely consistent with our determination that 
the stipulation language in this case constitutes a "floor" but 
not a "ceiling" for the credit amount. 
No. 
2016AP832 
 
21 
 
conclusion that Musikantow conceded the amount of the credit.  
As set forth above, Musikantow requested several times that his 
credit not be bound by the amount of the winning bid at the 
sheriff's sale.  Although he may have conceded the fair value 
for purposes of confirmation of sale, he did not concede the 
amount of the credit.  As analyzed above, these are two separate 
questions. 
¶56 Accordingly, we determine that the stipulation in this 
case does not establish that the amount of the winning bid at 
the sheriff's sale shall be the sole credit toward the money 
judgment against Musikantow. 
IV 
¶57 In sum, we conclude that Wis. Stat. § 846.165 does not 
apply to credits toward a judgment on a guaranty.  Rather, it 
applies to the relationship between only the mortgagee and 
mortgagor 
who 
signed 
the 
promissory 
note 
underlying 
the 
mortgage.  Therefore, it cannot be read as requiring the circuit 
court to determine the amount of a credit to be applied to a 
judgment on a guaranty when confirming the foreclosure sale. 
¶58 We 
further 
conclude 
that 
when 
an 
action 
for 
foreclosure against a mortgagor and an action for a money 
judgment on a guaranty are brought in the same proceeding as in 
the instant case, the circuit court may, in its discretion, 
decide the separate questions of fair value for purposes of Wis. 
Stat. § 846.165 and the amount of any credit toward the judgment 
on the guaranty either at the same time or separately.  
No. 
2016AP832 
 
22 
 
Accordingly, the circuit court did not erroneously exercise its 
discretion in decoupling these questions. 
¶59 Finally, we determine that the stipulation in this 
case does not establish that the amount of the winning bid at 
the sheriff's sale shall be the sole credit toward the money 
judgment against Musikantow. 
¶60 Accordingly, we reverse the decision of the court of 
appeals and remand to the circuit court for a determination of 
the amount of the credit to be applied toward the judgment 
against Musikantow as guarantor. 
By the Court.—The decision of the court of appeals is 
reversed, and the cause remanded to the circuit court. 
 
 
 
No.  2016AP832.rgb 
 
1 
 
¶61 REBECCA GRASSL BRADLEY, J.   (dissenting).  The court 
of appeals correctly held that the unambiguous Stipulation for 
Judgment and Order for Judgment and Judgment of Foreclosure and 
Sale and Monetary Judgment signed by Alan S. Musikantow, 
Marshalls Point Retreat LLC, and Horizon Bank and entered by the 
circuit court on September 10, 2015 ("Stipulation and Order") 
should be enforced.  Under the Stipulation and Order, the 
parties agreed that Musikantow would be credited toward the 
judgment entered against him in the amount for which the 
property sold at the sheriff's sale.  The majority declines to 
enforce 
the 
parties' 
agreement 
and 
instead 
decides 
the 
Stipulation and Order does not mean what it says.   
¶62 Rather, the majority holds:  (1) the Stipulation and 
Order contemplated only part of the credit to be applied, and 
(2) a circuit court presiding over a combined action for 
foreclosure against the mortgagor and for monetary judgment 
against the guarantor has the discretion to confirm the 
sheriff's sale without determining the guarantor's credit 
arising from the sale.  The majority's holding ignores the fact 
that the Stipulation and Order——by its plain terms——resolves the 
entire proceeding against both Musikantow and Marshalls Point 
and requires the issues of "fair value" and the guarantor's 
credit to be resolved concurrently.  The majority rewrites the 
parties' stipulated agreement, disregards its plain terms, and 
deprives one party of the benefit of the terms for which it 
bargained.  Accordingly, I cannot join the majority's opinion. 
No.  2016AP832.rgb 
 
2 
 
I. BACKGROUND 
A. The Facts 
¶63 Marshalls Point borrowed $5 million from Horizon Bank 
under a Promissory Note secured by mortgaging lakefront property 
in Sister Bay.  Musikantow individually signed a Commercial 
Guaranty for payment and performance on the note executed by 
Marshalls Point, of which he was the sole member.  After 
Marshalls Point defaulted, Horizon Bank initiated foreclosure 
proceedings in Door County Circuit Court, seeking foreclosure 
and sale of the property and demanding a monetary judgment 
against Musikantow pursuant to the terms of his guaranty for 
$4,043,555.55.  The parties stipulated to entry of judgment on 
September 10, 2015.  The Stipulation and Order provided that 
Horizon Bank was owed $4,043,555.55, which was entered as the 
amount of the judgment against Musikantow; the premises were to 
be sold "at a fair and adequate price"; and the amount paid to 
Horizon Bank from the proceeds of the sale "shall be credited" 
toward the monetary judgment against Musikantow. 
B. The Stipulation and Order  
¶64  The Stipulation and Order is a single 10-page 
document with the parties' stipulation set forth on pages 1 to 
the top of 4 and the circuit court's Order for Judgment and 
Judgment set forth on pages 4 through 10.1  Paragraph (b) of the 
Stipulation 
and 
Order 
provides 
that 
Marshalls 
Point 
and 
                                                 
1 The Stipulation signed by the parties is arranged in 
lettered paragraphs, while the Order for Judgment signed by the 
circuit court is arranged in numbered paragraphs.   
No.  2016AP832.rgb 
 
3 
 
Musikantow "each consent and agree to the Order for Judgment and 
Judgment of Foreclosure and Sale and Monetary Judgment . . . and 
stipulate and agree that said Order for Judgment and Judgment of 
Foreclosure and Sale and Monetary Judgment . . . be immediately 
entered . . . ."  The first paragraph of the Order for Judgment 
provides that "there are no issues of law or fact which have 
been joined which would preclude judgment for the Plaintiff in 
the form set forth below . . . ."   
¶65 The Stipulation and Order provides the details of how 
the parties would resolve Horizon Bank's claims against both 
Marshalls Point and Musikantow.  Pursuant to paragraph (c) of 
the Stipulation and Order, the property would be sold under Wis. 
Stats. ch. 846 at a sheriff's sale.  Paragraph 8 of the 
Stipulation and Order requires "the Premises [] to be sold at a 
fair 
and 
adequate 
price . . . ." 
 
Paragraph 
10 
of 
the 
Stipulation and Order provides that Horizon Bank, having chosen 
to proceed under Wis. Stat. § 846.103, waived rights to a 
deficiency judgment against Marshalls Point.2  Paragraph (d) of 
                                                 
2 Wisconsin Stat. § 846.103(1) provides for a redemption 
period prior to a foreclosure sale.  Section 846.103(2) provides 
for a reduced redemption period when a plaintiff in a 
foreclosure action "elect[s] by express allegation in the 
complaint to waive judgment for any deficiency which may remain 
due to the plaintiff after sale of the mortgaged premises 
against every party who is personally liable for the debt 
secured by the mortgage . . . ."  A plaintiff that waives a 
deficiency judgment does not "forfeit the right to obtain a 
judgment against a guarantor of payment" because "guarantors are 
not parties 'personally liable for the debt secured by the 
mortgage.'"  Bank Mut. v. S.J. Boyer Const., Inc., 2010 WI 74, 
¶77, 326 Wis. 2d 521, 785 N.W.2d 462. 
No.  2016AP832.rgb 
 
4 
 
the Stipulation and Order reserved to Horizon Bank "the right to 
a monetary judgment against the guarantor-defendant ALLEN S. 
MUSIKANTOW (as provided for in the Judgment), which right shall 
not be limited or impaired in any way by this Stipulation."   
¶66 Paramount 
to 
the 
issue 
before 
this 
court, 
the 
Stipulation and Order describes in paragraph 11 the only credit 
Musikantow could receive from the sale of the premises: 
The amount paid to [Horizon Bank] from the proceeds of 
said sale of the Premises, remaining after deduction 
by [Horizon Bank] of the amount of interest, fees, 
costs, expenses, disbursements and other charges paid 
or incurred by [Horizon Bank] not included in the 
monetary judgment against [Musikantow] . . . shall be 
credited by [Horizon Bank] as payment on said monetary 
judgment. 
(Emphasis added.)  
¶67 In paragraph (f) of the Stipulation and Order, 
Musikantow and Marshalls Point "reserve all rights, objections 
and defenses available to them under Section 846.165 of the 
Wisconsin Statutes or other applicable law in the event [Horizon 
Bank] applies to the Court for confirmation of a foreclosure 
sale of the Premises pursuant to the Judgment."3  Under that 
                                                 
3 Wisconsin Stat. § 846.165 provides the means by which the 
parties to a foreclosure action can apply for confirmation of 
sale and a deficiency judgment.  Subsection (1) entitles parties 
appearing in the action to prior notice of confirmation of sale 
proceedings.  Subsection (2) provides: 
In case the mortgaged premises sell for less than the 
amount due and to become due on the mortgage debt and 
costs of sale, there shall be no presumption that such 
premises sold for their fair value and no sale shall 
be confirmed and judgment for deficiency rendered, 
until the court is satisfied that the fair value of 
(continued) 
No.  2016AP832.rgb 
 
5 
 
statute, if the sale price is less than the amount due on the 
mortgage debt, the circuit court may not presume the premises 
sold for fair value; rather, the circuit court instead must be 
satisfied that the fair value of the premises is credited on the 
mortgage debt before confirming the sale.  This procedure 
provides interested parties the opportunity to offer evidence in 
support of whatever amounts they contend reflect the fair value 
of the property——before the court confirms the sale.  This is 
the right Musikantow preserved under paragraph (f) of the 
Stipulation and Order. 
                                                                                                                                                             
the premises sold has been credited on the mortgage 
debt, interest and costs. 
Fair value is not the same as fair market value, but rather 
is "a value determined by the property's sale value."  Bank of 
New York v. Mills, 2004 WI App 60, ¶10, 270 Wis. 2d 790, 678 
N.W.2d 332 (citing First Fin. Sav. Ass'n v. Spranger, 156 
Wis. 2d 440, 444, 456 N.W.2d 897 (1990)).  In the context of a 
sheriff's sale, the circuit court will confirm the sale and 
accept the winning bid as the fair value so long as that price 
is of "such reasonable value as does not shock the conscience of 
the court."  First Wis. Nat'l Bank of Oshkosh v. KSW Invs., 
Inc., 71 Wis. 2d 359, 367, 238 N.W.2d 123 (1976) (citation 
omitted).  "[M]ere inadequacy of price is not usually sufficient 
grounds of itself for vacating a judicial sale . . . unless the 
inadequacy is so gross as to shock the conscience and raise a 
presumption of fraud, unfairness, or mistake."  Gumz v. 
Chickering, 19 Wis. 2d 625, 635, 121 N.W.2d 279, 284 (1963) 
(citing Anthony Grignano Co. v. Gooch, 259 Wis. 138, 47 N.W.2d 
895 (1951).  Where the mortgagee waives any deficiency judgment 
against the mortgagor, such waiver creates a presumption that 
the court's fair value determination is correct.  Bank of New 
York, 
270 
Wis. 2d 790, 
¶15. 
 
Regardless 
of 
whether 
the 
presumption of correctness arises or not, "[t]he statute does 
not eliminate the requirement that the court find 'fair value.'"  
Id. 
No.  2016AP832.rgb 
 
6 
 
C. The Circuit Court's Errors 
¶68 After successfully submitting a credit bid4 on the 
property for $2,250,000, Horizon Bank subsequently moved to 
confirm the sale, according to Wis. Stat. § 846.165(2) and 
paragraph (f) of the Stipulation and Order, asserting that the 
bid represented the fair value of the property.  Horizon Bank 
also stated, in conformance with paragraphs 8 and 10 of the 
Stipulation and Order, that it would not seek a deficiency 
judgment against Marshalls Point and asked the circuit court to 
apply the amount of Horizon Bank's credit bid as the credit on 
the $4,043,555.55 monetary judgment owed by Musikantow.   
¶69 Musikantow and Marshalls Point did not object that 
Horizon Bank's credit bid of $2,250,000 could constitute fair 
value, but they requested the order confirming sale include 
language that the sale price have no collateral estoppel or res 
judicata effect on Musikantow.  If the order did not contain 
this language, Marshalls Point and Musikantow objected to that 
amount being credited upon the judgment against Musikantow.   
¶70 The circuit court held a hearing to confirm the 
sheriff's sale on December 2, 2015.  At that time, Marshalls 
Point and Musikantow disclosed a witness who was prepared to 
testify 
that 
the 
property 
had 
a 
market 
value 
exceeding 
                                                 
4 When a lender bids on property at a sheriff's sale, the 
amount it successfully bids is the price "paid" for the property 
because it is required to offset the amount bid against the 
amount owed by the mortgagor or, as in this case where the 
deficiency is waived, against the guarantor.  McFarland State 
Bank v. Sherry, 2012 WI App 4, ¶5 n.1, 338 Wis. 2d 462, 809 
N.W.2d 58. 
No.  2016AP832.rgb 
 
7 
 
$10,000,000.  The court adjourned the hearing until December 22, 
2015, in order to hear this evidence.   
¶71 At the December 22nd hearing, Marshalls Point and 
Musikantow changed the position they took at the December 2nd 
hearing and asserted for the first time that the circuit court 
need not make an evidentiary finding regarding the property's 
value as to the guarantor because the guaranty contained a 
governing law provision providing that the guaranty is governed 
by "federal law applicable to the Lender and, to the extent not 
preempted by federal law, the laws of the State of Indiana 
without regard to its conflicts of law provisions."  Marshalls 
Point and Musikantow informed the circuit court that Horizon 
Bank had already commenced an action in the Middle District of 
Florida, where Musikantow resided, to enforce the monetary 
judgment.  Marshalls Point and Musikantow asked the circuit 
court to decline to set the amount to be credited against the 
monetary judgment and let the federal court in Florida do so.   
¶72 Horizon Bank objected many times over, explaining that 
the federal action was solely a "domestication of the monetary 
judgment that this Court has already entered on the guarantee in 
these proceedings."  Therefore, it was necessary for the circuit 
court to decide the amount to be credited on Musikantow's 
monetary judgment.  In addition, Horizon Bank asserted that if 
Musikantow wanted to raise an issue of law that would absolve 
him of his liability as guarantor, he should have raised it 
before the monetary judgment was entered.  Horizon Bank also 
observed that there was no issue of personal or subject matter 
No.  2016AP832.rgb 
 
8 
 
jurisdiction that would bar the circuit court in Wisconsin from 
determining the credit amount to be applied toward the monetary 
judgment against Musikantow.   
¶73 The circuit court granted Musikantow's oral motion and 
declined to determine the credit to be applied to the judgment 
against him, believing that it was "dealing with a pretty set 
principle that federal law always trumps state law," but 
ultimately and erroneously deciding that "the guarantee is to be 
governed 
by 
federal 
law," 
completely 
disregarding 
the 
Stipulation and Order.  The circuit court granted Horizon Bank's 
motion for confirmation of the sheriff's sale, finding the 
credit bid of $2,250,000 "represents the fair and reasonable 
value for the property and based upon the stipulation of 
judgment of foreclosure" was to be applied to the total 
indebtedness due on the mortgage debt.   
¶74 Subsequently, the circuit court entered two orders 
memorializing the oral rulings from the December 22nd hearing.  
In the "Order Confirming Sheriff's Sale," the circuit court 
confirmed the sale of the property to Horizon Bank, finding 
"that the amount bid by Horizon Bank, National Association for 
the purchase of the mortgaged premises represents the fair value 
of said premises . . . ."  The circuit court crossed out the 
final paragraph of the order, which stated:  
After application to the Judgment indebtedness of the 
amount bid at sheriff's sale of $2,250,000, there 
remains due under the Judgment entered against Allen 
S. Musikantow the sum of $1,869,460.70, as of November 
4, 2015 together with subsequently accruing interest, 
fees and costs. 
No.  2016AP832.rgb 
 
9 
 
¶75 In its second order, entered on January 22, 2016, the 
circuit court "grant[ed] the motion of Allen S. Musikantow to 
decline to make a finding of the amount to be credited against 
the judgment of Horizon Bank, National Association against 
[Musikantow] as guarantor" "in light of the language in the 
Guaranty document indicating that it is to be governed by 
Federal Law."  The court ordered that it "will, if required by a 
Federal Court, make a determination as to such amount to be 
credited 
against 
the 
judgment 
of 
Horizon 
Bank, 
National 
Association against [Musikantow]."  Horizon Bank appealed.   
¶76 The court of appeals reversed the circuit court's 
decision and remanded with instructions to credit Musikantow 
$2,250,000, the amount of the winning bid at the sheriff's sale.  
Horizon Bank, Nat'l Ass'n v. Marshalls Point Retreat LLC, No. 
2016AP832, unpublished slip op., ¶2 (Wis. Ct. App. Jan. 24, 
2017) (per curiam).  The court of appeals concluded the circuit 
court misinterpreted the governing law provision, which simply 
indicates which jurisdiction's substantive law governs the 
guaranty, but does not restrict the court's subject matter or 
personal jurisdiction over the case.  Id., ¶20.  It held the 
circuit court erred by refusing to determine the amount of 
credit because there was no reason why the circuit court could 
not apply whatever law was appropriate and determine the correct 
credit to apply toward the judgment against Musikantow.  Id. 
¶77 The court of appeals then determined, as agreed by all 
of the parties under the Stipulation and Order, that $2,250,000 
should be applied as the credit toward the monetary judgment 
No.  2016AP832.rgb 
 
10 
 
against Musikantow.  Id., ¶21.  It concluded "[t]he only 
reasonable interpretation of the phrase 'the amount paid to 
Horizon Bank from the proceeds of said sale of the Premises' is 
that it refers to the amount of the winning bid at the sheriff's 
sale."  Id., ¶22.  Musikantow conceded in the circuit court that 
this amount represented fair value and accordingly should be 
credited to the monetary judgment against Musikantow.  Id., ¶23.  
While the court of appeals recognized that the governing law 
clause in Musikantow's guaranty provided for "federal law and, 
to the extent not preempted by federal law, . . . Indiana law," 
it noted that Musikantow failed to cite any law contrary to the 
Stipulation and Order's requirement to credit him $2,250,000 and 
no other amount.  Id., ¶24. 
¶78 Musikantow moved for reconsideration, arguing that he 
was prepared to challenge the fair value of the property, but 
did not present the evidence because the circuit court agreed 
that the amount of his credit would not be tied to the fair 
value finding.  The court of appeals denied the motion for 
reconsideration.  This court granted Musikantow's petition for 
review. 
II. STANDARD OF REVIEW 
¶79 The 
majority's 
primary 
error 
arises 
from 
its 
misapplication of the erroneous exercise of discretion standard.  
The court was tasked with addressing whether the circuit court 
erroneously exercised its discretion when it decoupled the 
determination of the credit to be applied to the guarantor's 
obligation from the underlying mortgage foreclosure action 
No.  2016AP832.rgb 
 
11 
 
against the debtor, in spite of the Stipulation and Order 
resolving the claims against both.  This court will uphold a 
circuit court's exercise of discretion if the circuit court 
"exercised its discretion in accordance with accepted legal 
standards and in accordance with the facts of record."  State v. 
Wollman, 86 Wis. 2d 459, 464, 273 N.W.2d 225 (1979) (citation 
omitted).  "If there was a reasonable basis for the court's 
determination, then we will not find an erroneous exercise of 
discretion."  State v. Hammer, 2000 WI 92, ¶21, 236 Wis. 2d 686, 
613 N.W.2d 629 (citation omitted).  I conclude the circuit court 
erroneously exercised its discretion by not following the 
parties' stipulation or its own order. 
¶80 The majority's secondary error arises from its failure 
to properly 
set forth and apply 
the law 
regarding the 
interpretation of stipulations.  See majority op., ¶¶52-54.  
This 
court 
comprehensively 
explained 
the 
standards 
for 
construing stipulations in Stone v. Acuity, 2008 WI 30, ¶67, 308 
Wis. 2d 558, 747 N.W.2d 149.  We review the interpretation of a 
stipulation de novo.  Id., ¶21.  The "interpretation of a 
stipulation must, above all, give effect to the intention of the 
parties."  Id., ¶67 (quoting Pierce v. Physicians Ins. Co. of 
Wis., Inc., 2005 WI 14, ¶31, 278 Wis. 2d 82, 692 N.W.2d 558). To 
determine the parties' intent, the stipulation's terms "should 
be given their plain or ordinary meaning."  Id. (quoting Huml v. 
Vlazny, 2006 WI 87, ¶52, 293 Wis. 2d 169, 716 N.W.2d 807).  
"While relief from stipulations is governed by Wis. Stat. 
§ 806.07, principles of contract law apply in interpreting 
No.  2016AP832.rgb 
 
12 
 
stipulations."  Id. (citing Kocinski v. Home Ins. Co., 154 
Wis. 2d 56, 67-68, 452 N.W.2d 360 (1990)).  "If the agreement is 
not ambiguous, ascertaining the parties' intent 'ends with the 
four corners of the contract, without consideration of extrinsic 
evidence.'"  Id. (quoting Huml, 293 Wis. 2d 169, ¶52).  Terms of 
a stipulation are ambiguous if "reasonably or fairly susceptible 
to more than one construction."  Id., ¶86 (Roggensack, J., 
concurring in part, dissenting in part) (quoting Flejter v. 
Estate of Flejter, 2001 WI App 26, ¶28, 240 Wis. 2d 401, 623 
N.W.2d 552). 
¶81 The fact that a stipulation "appears by hindsight to 
have been a bad bargain is not sufficient by itself to warrant 
relief."  Pasternak v. Pasternak, 14 Wis. 2d 38, 46, 109 
N.W.2d 511 (1961).  Rather, a court will decline to enforce an 
unambiguous stipulation only in two instances:  (1) where it was 
not "formalized in the way required by sec. 807.05," Kocinski, 
154 Wis. 2d at 67 (citation omitted); or (2) "in a plain case of 
fraud, mistake, or oppression," Illinois Steel Co. v. Warras, 
141 Wis. 119, 125, 123 N.W. 656 (1909); see also Burmeister v. 
Vondrachek, 86 Wis. 2d 650, 664, 273 N.W.2d 242 (1979) (first 
citing Wis. Stat. § 806.07(1) (1978-79); then citing Pasternak, 
14 Wis. 2d at 38; then citing State ex rel. S. Colonization Co. 
v. Cir. Ct. of St. Croix County, 187 Wis. 1, 203 N.W. 923 
(1925)).  Neither party asserts the Stipulation and Order 
suffers from either infirmity, and because the Stipulation and 
Order is not ambiguous, the circuit court was required to 
enforce it.  Its failure to do so was erroneous. 
No.  2016AP832.rgb 
 
13 
 
III. ANALYSIS 
 
A. The Circuit Court Erroneously Exercised its Discretion by 
Failing to Apply the Stipulation and Order. 
¶82 The 
Stipulation 
and 
Order 
effectuated 
a 
global 
resolution of Horizon Bank's foreclosure and monetary judgment 
claims against Marshalls Point and Musikantow, respectively.  A 
plain-meaning interpretation of the 
Stipulation and Order 
required the circuit court to apply the credit toward the 
monetary judgment against Musikantow in an amount equal to the 
proceeds of the sale of the property, unless Musikantow 
successfully argued the sale price did not accurately reflect 
fair value.  Here, the proceeds were in the form of Horizon 
Bank's credit bid.  The circuit court should have flatly 
rejected Musikantow's last hour5 choice of law argument because 
the Stipulation and Order, executed in Wisconsin, nullified the 
guaranty's choice of law provision.  The majority errs in 
concluding that the circuit court's decision to "decouple" the 
guaranty and foreclosure sale proceedings "was not an error of 
fact or law and thus its exercise of discretion was not 
erroneous."  Majority op., ¶45. 
¶83 By sanctioning the circuit court's actions, the 
majority overlooks the two false premises underlying the circuit 
court's decision:  First, the circuit court inexplicably 
imported the governing law provision from the guaranty into the 
                                                 
5 At no point, until the December 22nd confirmation of sale 
hearing, did any party dispute either the application of 
Wisconsin law or venue.  
No.  2016AP832.rgb 
 
14 
 
Stipulation and Order.6  The circuit court failed to recognize 
that the terms and conditions of the guaranty no longer applied 
once the parties entered into the Stipulation and Order to 
resolve their dispute.  Second, the federal court in which 
Horizon Bank filed the domestication action lacked any power 
whatsoever to determine fair value, and could only enforce the 
judgment against Musikantow.   
¶84 As noted by the court of appeals, there was both a 
forum selection clause in the guaranty providing that litigation 
was to be venued in LaPorte County, Indiana, and a governing law 
provision providing that federal law or, unless preempted, 
Indiana law applied to the interpretation of the guaranty.  
Despite these provisions, Horizon Bank filed its complaint in 
Wisconsin and Musikantow raised no objection until after the 
Stipulation and Order was executed by the parties and entered by 
the court.  Thus, the circuit court had jurisdiction over the 
entire proceeding by virtue of the parties stipulating to 
                                                 
6 A governing law provision permits parties to "expressly 
agree that the law of a particular jurisdiction shall control 
their contractual relations."  Bush v. Nat'l Sch. Studios, Inc., 
139 Wis. 2d 635, 642, 407 N.W.2d 883 (1987); see also Choice-of-
law 
clause, 
Black's 
Law 
Dictionary 
(10th 
ed. 
2014) 
("A 
contractual provision by which the parties designate the 
jurisdiction whose law will govern any disputes that may arise 
between the parties.").  By contrast, a forum selection or 
choice of venue clause permits parties to choose the forum in 
which to litigate their claims.  See Beilfuss v. Huffy Corp., 
2004 WI App 118, ¶¶7-8, 274 Wis. 2d 500, 685 N.W.2d 373; see 
also Forum-selection clause, Black's Law Dictionary (10th ed. 
2014) ("A contractual provision in which the parties establish 
the place (such as the country, state, or type of court) for 
specified litigation between them."). 
No.  2016AP832.rgb 
 
15 
 
settlement of the matter in Wisconsin Circuit Court.  When the 
parties reached a stipulated settlement, there was no reason to 
interpret the guaranty any longer, so the choice of law 
provision became irrelevant.  Unless Musikantow established that 
the Stipulation and Order was entered into under fraud, mistake, 
or oppression, he was not entitled to relief from it.  See supra 
¶21 (first citing Illinois Steel Co., 141 Wis. at 125; then 
citing Burmeister, 86 Wis. 2d at 664).  The Stipulation and 
Order superseded the guaranty not only on the issues of choice 
of law and venue but in its entirety, and the Stipulation and 
Order constituted the parties' exclusive agreement on the terms 
governing application of any credit toward the monetary judgment 
against Musikantow. 
¶85 As to the circuit court's second false premise, it 
failed to comprehend the purpose of the domestication action in 
the United States Court for the Middle District of Florida.  
That proceeding was commenced solely to enforce the judgment 
entered by the Wisconsin Circuit Court against Musikantow.  The 
action was filed in Florida federal district court on the basis 
of diversity of citizenship.  The Florida district court lacked 
jurisdiction to resolve the credit issue; its singular power in 
the domestication action was to make enforceable in Florida the 
monetary judgment entered in Wisconsin.  See Trauger v. A.J. 
Spagnol Lumber Co., 442 So. 2d 182, 183 (Fla. 1983) ("An action 
to recover on a foreign judgment is completely independent from 
the original cause of action.  It is the judgment from the other 
state which forms the basis for the cause of action, and the 
No.  2016AP832.rgb 
 
16 
 
validity of the claim on which the foreign judgment was entered 
is not open to inquiry.").7  
¶86 These are basic principles of contract and civil 
procedure law.  The circuit court's failure to recognize and 
apply them was clearly erroneous.  It is unclear whether 
Musikantow's arguments on these matters arose from trial 
counsel's strategy or mistake.  Regardless, his arguments 
inducing the circuit court to decline to determine Musikantow's 
credit cannot now give his client the opportunity to recontest 
fair value.  Musikantow contends that denying him another chance 
to litigate the fair value of the property would offend 
procedural due process.  However, procedural due process simply 
requires notice and an opportunity to be heard.  Sweet v. Berge, 
113 Wis. 2d 61, 64, 334 N.W.2d 559 (Ct. App. 1983) (citation 
omitted).  Here, Musikantow had both. 
¶87 Musikantow explicitly reserved rights to litigate fair 
value prior to confirmation of the sheriff's sale under Wis. 
Stat. § 846.165, per paragraph (f) of the Stipulation and Order.  
Paragraph 8 of the Stipulation and Order required the premises 
"to be sold at a fair and adequate price."  In the Order 
Confirming Sheriff's Sale, the circuit court found "that the 
                                                 
7 See also Stefan A. Riesenfeld, Creditors' Remedies and the 
Conflict of Laws——Part One: Individual Collection of Claims, 60 
Colum. L. Rev. 659, 681 n.12 (1960) ("The term 'domesticated 
foreign 
judgment' 
is 
employed 
to 
designate 
out-of-state 
judgments that by some step short of an action on the foreign 
judgment 
resulting 
in 
a 
domestic 
judgment 
have 
become 
assimilated 
to 
domestic 
judgments 
for 
purposes 
of 
enforcement.").  
No.  2016AP832.rgb 
 
17 
 
amount bid by Horizon Bank, National Association for the 
purchase of the mortgaged premises represents the fair value of 
said premises."  If Musikantow disagreed, he should have 
contested this before the circuit court instead of just talking 
about doing so.  His failure to present testimony or any 
evidence on fair value in any respect constitutes a waiver of 
the rights he reserved under the Stipulation and Order.  See 
Brunton 
v. 
Nuvell 
Credit 
Corp., 
2010 
WI 50, 
¶35, 
325 
Wis. 2d 135, 
785 
N.W.2d 302 
("waiver 
is 
the 
intentional 
relinquishment or abandonment of a known right" (quoting State 
v. Ndina, 2009 WI 21, ¶29, 315 Wis. 2d 653, 761 N.W.2d 612)).  
By declining to apply any credit to the monetary judgment 
against Musikantow based on Musikantow's argument that this 
determination needed to be made in federal court, the circuit 
court failed to correctly apply the law, the parties' agreement, 
and its own order.    
¶88 Ignoring the fact that the Stipulation and Order 
resolved all of the parties' claims and defenses, the majority 
extends the circuit court's error by permitting the proceedings 
against the guarantor and mortgagor to be decoupled:  "Further 
reflecting that fair value in the context of Wis. Stat. 
§ 846.165 and the credit due on a guaranty are separate issues, 
the amount of a credit to be applied to a guaranty may be 
litigated in an action wholly apart from the fair value 
contemplated by §846.165."  Majority op., ¶40.  All of this is 
true, as a general proposition.  In so holding in this case, 
however, the majority rewrites the terms of the Stipulation and 
No.  2016AP832.rgb 
 
18 
 
Order by excising the stipulated terms and conditions governing 
the calculation of the monetary judgment against Musikantow.  
The majority also misconstrues McFarland State Bank v. Sherry, 
2012 WI App 4, 338 Wis. 2d 462, 809 N.W.2d 58, a case wholly 
consistent with the terms of the Stipulation and Order and also 
instructive on the issue of decoupling mortgage foreclosure and 
guaranty proceedings generally.   
¶89 In McFarland, a bank successfully submitted a credit 
bid and acquired the mortgaged property at a sheriff's sale.  
Id., ¶1.  A monetary judgment was entered against the guarantor 
for the remaining balance on the loan.  Id.  In the order 
confirming the sale, the circuit court found the property had a 
fair value of $147,000.  Id., ¶5.  The guarantor argued he was 
entitled to an offset against the monetary judgment in that 
amount.  Id., ¶12.  Among the bank's arguments, it cited Crown 
Life Ins. Co. v. LaBonte,8 for the proposition that the fair 
value finding should not fix the amount of the offset; instead, 
"the circuit court could find a different value of the property, 
perhaps 
relying 
on 
additional 
evidence, 
for 
purposes 
of 
determining what [the guarantor's] offset should be."  Id., ¶29.  
The court of appeals rejected this argument, instead requiring 
that the confirmed sale price be applied as the credit to the 
guarantor.  Id., ¶31.  It held that Crown Life did not "stand[] 
for the proposition" that a guarantor could be credited in an 
amount different from the fair value finding because "the trial 
                                                 
8 111 Wis. 2d 26, 32, 330 N.W.2d 201 (1983). 
No.  2016AP832.rgb 
 
19 
 
court's use of that approach was not at issue before the supreme 
court."  Id., ¶29-30.  Moreover, the holding in Crown Life was 
inapplicable in McFarland because "the guarantor in Crown Life, 
unlike [the guarantor in McFarland], was not a party to the 
foreclosure proceedings."  Id., ¶30.  As a result, the guarantor 
in Crown Life, unlike the guarantor in McFarland——or Musikantow 
in this case——did not have the same opportunity to contest a 
fair value finding tied to the amount of the credit bid. 
¶90 Under McFarland, where the guarantor is a party to the 
mortgage foreclosure proceedings, "it does not make sense" to 
"calculate[] a guarantor's liability based on a property value 
different than the price for which the property originally sold 
at a sheriff's sale."  Id., ¶30.  In this context, the fair 
value determination applies against both the guarantor and the 
mortgagor.  No issues with due process arise because the 
guarantor is a party to the proceeding and can also litigate 
fair value alongside the mortgagor.  While McFarland does not 
control the disposition of this case——the Stipulation and Order 
does——it is not a leap of logic to infer that parties 
negotiating settlement agreements under comparable facts rely on 
pertinent case law in crafting them.  Here, the procedure for 
determining fair value tracks the rationale explained in 
McFarland for tying the sheriff's sale proceeds to the offset 
applied in the guarantor's favor——subject to the guarantor's 
ability to offer evidence supporting a different fair value 
before confirmation of the sale. 
No.  2016AP832.rgb 
 
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¶91 In distinguishing McFarland, the majority instead 
relies on Crown Life to support its conclusion that "the debt 
due under the mortgage and under the guaranty may properly 
follow separate tracks."  Majority op., ¶42.  However, as noted 
in McFarland, the guarantor in Crown Life——unlike the guarantor 
in McFarland——was not a party to the foreclosure proceedings.  
Unlike this case, in Crown Life there was no global settlement 
of the foreclosure action and the action on the guaranty, which 
proceeded independently and were resolved separately, the latter 
via a court trial.  Accordingly, Crown Life lends support only 
to the conclusion that these two actions may proceed separately.  
But that unremarkable notion does not afford the circuit court 
the discretion to disregard the terms negotiated by the parties, 
set forth in a written stipulation and order, and entered by the 
court as a final judgment resolving all claims and defenses 
between the mortgagor, the bank, and the guarantor.  Even the 
broad powers of a court acting in equity do not give a court 
such authority.  A stipulation "is entitled to all the sanctity 
of any other [contract], and, when on the faith of it the 
parties have so acted in execution thereof that the status quo 
cannot be re-established as to one of them, it is only in a 
plain case of fraud, mistake, or oppression that the court 
should set it aside."  Illinois Steel Co., 141 Wis. at 125.  The 
majority nevertheless invokes a circuit court's equitable powers 
to set aside a stipulated settlement of equitable and contract 
claims, to ignore the Stipulation and Order's terms, and to 
decide the already-settled issues as the court wished rather 
No.  2016AP832.rgb 
 
21 
 
than as the parties agreed.  Why would any similarly-situated 
parties ever settle such claims if the court may act on whim?9   
¶92  By 
ignoring 
McFarland 
and 
casting 
aside 
the 
Stipulation and Order, the majority, under the guise of equity, 
jettisons fundamental rules governing the interpretation of 
stipulations and civil procedure that previously informed 
settlements of the sort reached by the parties in this case.  
See majority op., ¶44.  This ruling is without precedent but now 
puts lenders, debtors and guarantors on notice that even a 
stipulated settlement, signed court order, and entered judgment 
will not bind a court to its terms but may be disregarded and 
rewritten by the circuit court.   
B. The Stipulation and Order is Not Ambiguous Regarding the 
Amount Musikantow Will Be Credited on the Monetary Judgment. 
¶93 The majority's interpretation of the Stipulation and 
Order regarding the amount to be credited to Musikantow against 
the monetary judgment is incorrect.  Paragraph 11 dictates how 
Musikantow is to be credited for the value from the sale of the 
premises acquired by Horizon Bank: 
The amount paid to [Horizon Bank] from the proceeds of 
said sale of the Premises, remaining after deduction 
by [Horizon Bank] of the amount of interest, fees, 
costs, expenses, disbursements and other charges paid 
                                                 
9 The majority's disposition of this case impacts not only 
these parties but potentially all lenders and borrowers.  As 
correctly 
noted 
by 
the 
amicus 
curiae, 
Wisconsin 
Bankers 
Association, 
the 
uncertainty 
generated 
by 
the 
majority's 
decision to disturb the reasonable expectation that the parties' 
contract would be enforced may increase the cost of lending, 
which basic economic principles suggest will be passed on to 
borrowers rather than borne by lenders. 
No.  2016AP832.rgb 
 
22 
 
or incurred by [Horizon Bank] not included in the 
monetary judgment against [Musikantow] (set forth 
below) shall be credited by [Horizon Bank] as payment 
on said monetary judgment. 
The majority says this paragraph is ambiguous because it could 
reasonably be interpreted to mean the proceeds from the sale 
established the minimum amount of Musikantow's credit.  Majority 
op., ¶¶48-51.  I disagree.  
¶94 When read in the context of the Stipulation and Order, 
there is no reasonable alternative reading of paragraph 11's 
language——"proceeds 
of 
said 
sale . . . shall 
be 
credited . . . as payment on said monetary judgment"——except 
that Musikantow receives the $2,250,000 credit on the monetary 
judgment. 
 
The 
majority 
does 
not 
offer 
any 
reasonable 
alternative, nor does it employ any discernable principles of 
contract interpretation.  See majority op., ¶¶54-56.  Rather, 
the majority simply regards this phrase as open–ended——"the 
floor"——thereby entitling Musikantow to a credit on the monetary 
judgment in some amount greater than the $2,250,000 credit bid 
by Horizon Bank.  This conclusory assumption loses sight of the 
fact that paragraph 11 is part of a Stipulation and Order that 
resolves all claims and defenses between the parties.  The 
Stipulation and Order directs a sheriff's sale of the premises 
for a "fair and adequate price" (paragraph 8); preserves 
Musikantow's rights to contest court confirmation of the sale 
(paragraph (f)); and mandates Musikantow be credited the amount 
paid to Horizon Bank from the proceeds of the sale as payment on 
the monetary judgment against him (paragraph 11).  There is no 
provision whatsoever permitting the court to "leav[e] the 
No.  2016AP832.rgb 
 
23 
 
determination of the credit toward the guaranty for another 
day."  Majority, ¶44.   
¶95 The negative implication canon——expressio unius est 
exclusio alterius——is especially instructive here.  "Under this 
principle, a specific mention in a contract of one or more 
matters is considered to exclude other matters of the same 
nature or class not expressly mentioned, even when all such 
matters would have been inferred had none been expressed."  
Goebel v. First Fed. Sav. & Loan Ass'n of Racine, 83 
Wis. 2d 668, 673, 266 N.W.2d 352 (1978) (citations omitted).  
Essentially, the canon provides that the thing specified "can 
reasonably be thought to be an expression of all that shares in 
the grant or prohibition allowed."  Antonin Scalia & Bryan A. 
Garner, Reading Law:  The Interpretation of Legal Texts 107 
(2012).  
¶96 Here, paragraph 11 is the sole and specific mention in 
the Stipulation and Order of how much Musikantow will be 
credited on the monetary judgment.  Paragraph 11 excludes 
alternative means by which Musikantow can be credited on the 
monetary judgment.  It does not contain inclusive language (for 
example, "not limited to," "including," "such as," "at least," 
et cetera), an integrated list of items to be credited, or any 
language that would indicate Musikantow is entitled to be 
credited more than the "proceeds of said sale" of the mortgaged 
property.  
¶97 The 
majority 
asserts 
that 
"[t]he 
stipulation 
prescribes what must be done, but it does not describe that the 
No.  2016AP832.rgb 
 
24 
 
amount is the totality of the credit."  Majority op., ¶54.  The 
negative implication canon rhetorically responds:  "Does not the 
act of prescribing the mode, necessarily imply a prohibition to 
all other modes?"  Scalia & Garner, supra ¶35, at 109-10 
(quoting South Carolina ex rel M'Cready v. Hunt, 20 S.C.L. (2 
Hill 1), 230 (S.C. Ct. App. 1834)).  Here, solely prescribing 
the mode and extent of crediting Musikantow from the "proceeds 
of said sale" works to exclude all other modes and amounts of 
credit.  
¶98 Regardless of the pervasive invocations of equity by 
the majority, the Stipulation and Order governs all issues 
presented.  Enforcing this agreement is entirely dispositive of 
Musikantow's appeal.  The Stipulation and Order is unambiguous 
and its terms provide the singular means by which Musikantow 
will be credited for "payment on said monetary judgment":  the 
"proceeds of said sale," specifically $2,250,000. 
IV 
¶99 The majority incorrectly invokes equity to trump the 
terms and conditions of a valid and enforceable Stipulation and 
Order.  The majority unwinds the Stipulation and Order, and 
"decouples" the contract claim against Musikantow from the 
foreclosure claim against Marshalls Point.  The Stipulation and 
Order mandates that Musikantow receive no more credit than the 
"proceeds of said sale," which was the amount of the $2,250,000 
credit bid, yet the majority allows Musikantow to return to the 
circuit court to relitigate an issue he waived by declining to 
exercise the rights he reserved under the Stipulation and Order.  
No.  2016AP832.rgb 
 
25 
 
The court of appeals decision was correct and I would affirm.  
Because equity may not override the terms of a stipulation and 
order for judgment, I respectfully dissent. 
 
 
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