Title: Walworth State Bank v. Abbey Springs Condo. Ass’n

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2016 WI 30 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
2014AP940 
COMPLETE TITLE: 
Walworth State Bank, 
          Plaintiff-Respondent-Petitioner, 
     v. 
Abbey Springs Condominium Association, Inc. and 
Abbey  
Springs, Inc., 
          Defendants-Appellants. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
(Reported at 363 Wis. 2d 655, 862 N.W.2d 903) 
(Ct. App. 2015 – Unpublished) 
 
 
OPINION FILED: 
April 29, 2016 
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
November 9, 2015 
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit 
 
COUNTY: 
Walworth 
 
JUDGE: 
Phillip A. Koss 
 
 
 
JUSTICES: 
 
 
CONCURRED: 
 
 
DISSENTED: 
ABRAHAMSON, J. dissents, joined by BRADLEY, A. W., 
J. 
 
NOT PARTICIPATING:          
 
 
 
ATTORNEYS: 
 
For the plaintiff-respondent-petitioner, there were briefs 
by Edward F. Thompson, and Clair Law Offices, S.C., Delavan, and 
oral argument by Edward F. Thompson. 
 
For the defendants-appellants, there was a brief by David 
C. Williams, and Harrison, Williams & McDonell, LLP, Lake 
Geneva, and oral argument by David C. Williams. 
 
There was an amicus curiae brief by John E. Knight, Kirsten 
E. Sprira, and Boardman & Clark LLP, Madison, on behalf of the 
Wisconsin Bankers Association.  
 
 
 
2016 WI 30
NOTICE 
This opinion is subject to further 
editing and modification.  The final 
version will appear in the bound 
volume of the official reports.   
No. 2014AP940 
(L.C. No. 
2013CV855) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Walworth State Bank, 
 
          Plaintiff-Respondent-Petitioner, 
 
     v. 
 
Abbey Springs Condominium Association, Inc. and 
Abbey Springs, Inc., 
 
          Defendants-Appellants. 
 
FILED 
 
APR 29, 2016 
 
Diane M. Fremgen 
Clerk of Supreme Court 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
cause remanded.   
 
¶1 
REBECCA G. BRADLEY, J.   We must decide whether a 
condominium policy violates Wisconsin law.  Abbey Springs 
Condominium 
Association, 
Inc. 
and 
Abbey 
Springs, 
Inc. 
(collectively, "Abbey Springs") have a Membership and Guest 
Policy that forbids both current and subsequent unit owners from 
utilizing 
recreational 
facilities 
until 
unpaid 
condominium 
assessments are paid in full.  In other words, the policy 
forbids 
new 
owners 
of 
a 
particular 
unit 
from 
utilizing 
recreational facilities if there are outstanding assessments 
No. 
2014AP940   
 
2 
 
attributable to the unit.  Following a foreclosure action and 
sheriff's sale of the property at issue to Walworth State Bank, 
the Bank paid the former owner's outstanding assessments under 
protest.  Walworth State Bank then asserted that the Abbey 
Springs policy violates Wisconsin law because it impermissibly 
revives a lien on the condominium units that was eliminated by 
the foreclosure action.  As an alternative argument, Walworth 
State Bank argues that the policy renders title to the units 
unmarketable.  The Walworth County Circuit Court1 agreed with 
Walworth State Bank and granted it summary judgment.  The court 
of appeals reversed.2  For the reasons that follow, we reverse 
the court of appeals. 
¶2 
We hold that Abbey Springs's Membership and Guest 
Policy effectively revived the lien against the property that  
the Order for Judgment on Foreclosure and Judgment (hereinafter 
Foreclosure Judgment) entered against Abbey Springs and the 
former unit owners had extinguished.  Although Abbey Springs 
concedes that Walworth State Bank had no legal obligation to pay 
the former owners' unpaid assessments following foreclosure, the 
policy dictates that any unpaid assessments stay with the unit 
and transfer to the new owners rather than travel with the 
                                                 
1 The Honorable Phillip A. Koss presiding. 
2 Walworth State Bank v. Abbey Springs Condo. Ass'n, No. 
2014AP940, unpublished slip op. (Wis. Ct. App. Mar. 26, 2015). 
No. 
2014AP940   
 
3 
 
former unit's owner who actually incurred the debt.3  The policy 
does so by preventing a new purchaser of any unit, whose only 
connection to the unpaid assessments is through the unit itself, 
from accessing the recreational facilities if the prior owner 
failed to pay his or her assessments.  As a result, the policy 
effectively allows Abbey Springs to assert a right against the 
property for the prior owner's unpaid assessments in violation 
of well-established foreclosure law.  Furthermore, the policy 
violates the Foreclosure Judgment that eliminated "all right, 
title, interest, lien or equity of redemption" of Abbey Springs 
in and to the foreclosed units.  Because we conclude that the 
condominium policy violates well-established foreclosure law and 
the Foreclosure Judgment entered in the underlying foreclosure 
action, we do not address Walworth State Bank's argument that 
the policy renders the unit's title unmarketable. 
I.  Background 
A.  Units 18 and 19 at Abbey Springs 
¶3 
Walworth State Bank held a first real estate mortgage 
on Units 18 and 19, a single family residence on two lots, in 
Abbey Springs Condominium No. 1.  Unit owners in Abbey Springs 
Condominium 
No. 
1 
pay 
assessments 
that 
allow 
access 
to 
recreational facilities that include a Yacht Club, restaurants, 
                                                 
3 Presumably Abbey Springs could pursue a separate action 
against 
the 
former 
unit 
owners 
to 
recover 
the 
unpaid 
assessments.  Its Membership and Guest Policy nevertheless ties 
unpaid assessments to the unit itself, regardless of a change in 
unit ownership. 
No. 
2014AP940   
 
4 
 
fitness and golf facilities, and boat slips.4  These recreational 
facilities are not listed as common elements of units located in 
Abbey Springs Condominium No. 1. 
¶4 
Abbey Springs has a Membership and Guest Policy that 
suspends both current unit owners and subsequent owners from the 
recreational facilities if unpaid assessments attributed to the 
unit are 90 days past due.  The policy, in pertinent part, 
provides: 
If any regular monthly or special assessment against 
any Unit is delinquent for more than ninety (90) days 
past its due date, the owner or owners of that Unit, 
and any subsequent owners, shall automatically and 
without notice be suspended from any use or occupation 
of the Yacht Club, Clubhouse Grille, Pool Café, 
fitness 
facilities, 
golf 
facilities, 
and 
boat 
launching facilities, until such time as assessments 
are paid in full. 
¶5 
In addition, Abbey Springs has Bylaws that govern 
operation of the property.  Article V, Section four, titled 
Waiver of Use, provides that "no unit owner may exempt himself 
from liability for his contribution towards the common expenses 
or recreational facilities expenses by waiver of the use or 
enjoyment of any of the common areas and facilities or the 
recreational facilities, or by abandonment of his unit." 
                                                 
4 As we understand it, the assessments cover membership 
costs and unit owners are required to pay additional costs for 
the actual use and enjoyment of at least some of the 
recreational facilities.  For example, the Membership and Guest 
Policy indicates that members are provided "a member account for 
which they can charge any club-related expense" and that unit 
owners are responsible for all charged amounts.   
No. 
2014AP940   
 
5 
 
B.  Underlying Foreclosure Action 
¶6 
In 2012, Walworth State Bank initiated a foreclosure 
action against the owners of units 18 and 19, a single family 
residence.  The Complaint named Abbey Springs as a defendant in 
that action due to its claim of unpaid assessments attributable 
to the property.  In January 2013, the Walworth County Circuit 
Court entered a Foreclosure Judgment.  It determined the total 
amount owed Walworth State Bank to be $855,511.41.  The circuit 
court's order and judgment in the foreclosure action also 
provided that the current owners and Abbey Springs were "forever 
barred and foreclosed of all right, title, interest, lien or 
equity of redemption" in and to the property.  The circuit court 
retained 
jurisdiction 
in 
the 
foreclosure 
action 
"until 
redemption, or confirmation of sale, whichever occurs first."  
Walworth State Bank later purchased the property in a sheriff's 
sale.  On April 29, 2013, the circuit court confirmed the 
sheriff's sale of the property to Walworth State Bank. 
¶7 
Prior to the sheriff's sale, Abbey Springs sent a 
letter to Walworth State Bank to alert the Bank to a policy it 
had adopted "to forbid use of the recreational facilities to the 
owners or occupants of any unit upon which assessments or other 
amounts owed to the Association are delinquent, regardless of 
whether or not the Association's lien rights were eliminated by 
foreclosure."  Abbey Springs suggested that Walworth State Bank 
include notification of this policy in its announcements of the 
sheriff's sale of the property.  On February 5, 2013, Abbey 
No. 
2014AP940   
 
6 
 
Springs sent a follow up letter to Walworth State Bank with a 
copy of the Membership and Guest policy enclosed. 
¶8 
Walworth State Bank responded to Abbey Springs's 
letters on June 24, 2013 and asserted that the Membership and 
Guest Policy violated numerous laws and the order in the 
foreclosure action.  On June 26, 2013, Abbey Springs countered 
that it "does not claim, and has never claimed, that Walworth 
State Bank or any grantee from Walworth State Bank is liable for 
past assessments due the Association."     
¶9 
Walworth State Bank arranged for the property to be 
sold to new buyers with a closing scheduled for July 12, 2013.  
However, on July 12, 2013, Abbey Springs's Executive Director 
issued a letter stating that the outstanding assessments would 
be satisfied if "the seller pays Abbey Springs $13,225.32."  As 
a result, the new buyers refused to close on the property as 
scheduled.  On the same day, July 12, 2013, Walworth State Bank 
sent Abbey Springs another letter accusing the condominium 
association of "thwarting" the sale and requiring Walworth State 
Bank to pay the outstanding assessments.  Abbey Springs 
reasserted its position——the Bank was not required to pay the 
prior owner's outstanding assessments——in a July 16, 2013 
letter.  Ultimately and under protest, Walworth State Bank paid 
the prior owners' unpaid assessments in the amount of $13,225.32 
to complete the sale of the property to the new owners. 
C.  Procedural History 
¶10 Walworth State Bank filed suit against Abbey Springs 
and asked the circuit court to declare Abbey Springs's policy in 
No. 
2014AP940   
 
7 
 
violation of Wisconsin law and to order judgment in the amount 
of $13,225.32 for the assessments it paid under protest.  The 
circuit court granted Walworth State Bank's summary judgment 
motion after considering cross-motions for summary judgment.  It 
determined that Abbey Springs's policy violated Wisconsin law by 
holding new owners jointly and severally liable for the prior 
owners' 
unpaid 
assessments 
in 
violation 
of 
Wis. 
Stat. 
§ 703.165(2) (2013-14)5 and by affecting the quality and 
marketability of the property's title in violation of Wis. Stat. 
§ 703.10(6).  It also granted Walworth State Bank a monetary 
judgment against Abbey Springs in the amount of $13,225.32. 
¶11 The court of appeals reversed.  Walworth State Bank v. 
Abbey Springs Condo. Ass'n, No. 2014AP940, unpublished slip op. 
(Wis. Ct. App. Mar. 26, 2015).  It held that the policy was not 
contrary to any Wisconsin statute and that Walworth State Bank 
had "no obligation to pay the delinquent assessments."  Id., 
¶18.  Specifically, it held that Wis. Stat. § 703.165(5)(b), 
which establishes lien priority for unpaid assessments, did not 
govern the issue of liability for the unpaid assessments.  Id., 
¶16.  It further held that Wis. Stat. § 703.165(2), which 
governs liability for assessments, does not govern liability for 
unpaid assessments in an involuntary grant, such as the 
sheriff's sale that occurred here.  Id., ¶18.  It further 
reasoned that "[t]he policy merely created a pay-to-play 
                                                 
5 All references to the Wisconsin Statutes are to the 2013-
14 version unless otherwise indicated. 
No. 
2014AP940   
 
8 
 
requirement, and did not attempt to create joint and several 
liability in any respect."6  Id.  
II.  Analysis 
¶12 Appellate 
courts 
independently 
review 
orders 
for 
summary judgment utilizing the "same methodology as the circuit 
court."  Yahnke v. Carson, 2000 WI 74, ¶10, 236 Wis. 2d 257, 613 
N.W.2d 102.  "Summary judgment is appropriate when 'the 
pleadings, 
depositions, 
answers 
to 
interrogatories, 
and 
admissions on file, together with the affidavits, if any, show 
that there is no genuine issue as to any material fact and that 
the moving party is entitled to a judgment as a matter of law.'"  
Id. (quoting Wis. Stat. § 802.08(2) (1995-96)). 
A.  Inapplicability of Wis. Stat. § 703.165(2) 
¶13 Walworth State Bank argues that Abbey Springs's 
Membership and Guest Policy violates Wis. Stat. § 703.165(2) by 
holding subsequent owners who obtain property in an involuntary 
sale jointly and severally liable for the unpaid assessments of 
                                                 
6 The court of appeals also held that Abbey Springs's policy 
did not render the units' title unmarketable because Walworth 
State Bank failed to produce any evidence that the policy 
prevented it from conveying title.  Walworth State Bank v. Abbey 
Springs Condo. Ass'n, No. 2014AP940, unpublished slip op., ¶20 
(Wis. Ct. App. Mar. 26, 2015). 
No. 
2014AP940   
 
9 
 
past owners.  It also asserts that the policy renders title to 
the units unmarketable in violation of Wis. Stat. § 703.10(6).7    
¶14 Whether the Membership and Guest Policy is valid in 
light of the Foreclosure Judgment that eliminated "all right, 
title, interest, lien or equity of redemption" of Abbey Springs 
in and to the property, presents an issue of first impression 
that is not directly controlled by Wisconsin case law or the 
Wisconsin Statutes.  Although Walworth State Bank argues that 
Wis. Stat. § 703.165(2) governs and that the policy is invalid 
under this statute, we do not agree.   
¶15 Wisconsin Stat. § 703.165 is titled: "Lien for unpaid 
common expenses, unpaid damages, and unpaid penalties."  Section 
703.165(2) pertains to "liability for assessments" and states, 
in full: 
A unit owner shall be liable for all assessments, or 
installments thereof, coming due while owning a unit, 
including any assessments coming due during the 
pendency of any claim by the unit owner against the 
association or during any period in which the unit is 
not occupied by the unit owner or is leased or rented 
to any other person.  In a voluntary grant, the 
grantee shall be jointly and severally liable with the 
grantor for all unpaid assessments against the grantor 
for his or her share of the common expenses up to the 
time of the voluntary grant for which a statement of 
condominium lien is recorded, without prejudice to the 
                                                 
7 Because we conclude that Abbey Springs's Membership and 
Guest Policy violates well-established foreclosure law, we do 
not address Walworth State Bank's alternative argument that the 
policy renders title to the units unmarketable under Wis. Stat. 
§ 703.10(6).  "Typically, an appellate court should decide cases 
on the narrowest possible grounds."  Maryland Arms Ltd. P'ship 
v. Connell, 2010 WI 64, ¶48, 326 Wis. 2d 300, 786 N.W.2d 15.   
No. 
2014AP940   
 
10 
 
rights of the grantee to recover from the grantor the 
amounts paid by the grantee for such assessments. 
Liability for assessments may not be avoided by waiver 
of the use or enjoyment of any common element or by 
abandonment of the unit for which the assessments are 
made. 
Wis. Stat. § 703.165(2)(emphasis added).  The statutory language 
emphasized above indicates that in a voluntary grant, a new 
owner 
is 
held 
jointly 
and 
severally 
liable 
for 
unpaid 
assessments owed by the prior owner.  Walworth State Bank relies 
on this language to argue that the inverse must be true in an 
involuntary grant, such as a sheriff's sale.  Specifically, 
Walworth State Bank's position is that in an involuntary grant, 
a new owner cannot be held jointly and severally liable for the 
outstanding assessments of the prior owner.  However, we agree 
with the court of appeals that the language in § 703.165(2) 
pertaining to voluntary grants of property has no bearing on the 
involuntary grant at issue here.  The liability of a new owner 
for the outstanding debt of the prior owner under the 
circumstances of an involuntary grant is not directly addressed 
in Chapter 703 and it is not this court's place to speak where 
the legislature was silent.8    
                                                 
8 "The principle that a matter not covered is not covered is 
so obvious that it seems absurd to recite it."  Antonin Scalia & 
Bryan A. Garner, Reading Law: The Interpretation of Legal Texts 
93 (2012).  "Courts must take statutes as they find them . . . . 
They are not the law-making body.  They are not responsible for 
omissions 
in 
legislation." 
 
Id. 
(citing 
R.W.M. 
Dias, 
Jurisprudence 232 (4th ed. 1976)).  
No. 
2014AP940   
 
11 
 
B.  The Law of Foreclosure 
¶16 Instead, we turn to pertinent statutory provisions 
governing condominiums, the Foreclosure Judgment entered against 
Abbey Springs in the underlying foreclosure action, and well-
established foreclosure law to render a decision.  Chapter 703 
of the Wisconsin Statutes, known as the Condominium Ownership 
Act, governs condominiums.  It explains that unpaid condominium 
assessments "constitute a lien on the units on which they are 
assessed" as long as certain statutory requirements are met.  
Wis. Stat. § 703.165(3).  Assessments are defined as "regular 
and special assessments for common expenses and charges, fines, 
or assessments against specific units or unit owners for damages 
to the condominium or for penalties for violations of the 
declaration, 
bylaws, 
or 
association 
rules." 
 
Wis. 
Stat. 
§ 703.165(1).   
¶17 Wisconsin Stat. § 703.165(5) also governs the priority 
given to a lien for unpaid assessments.  Applicable here is 
§ 703.165(5)(b), which provides that "a first mortgage recorded 
prior to the making of the assessment" has priority over a lien 
for unpaid condominium assessments. 
¶18 Here, it is undisputed that the former owners of Units 
18 and 19 had unpaid condominium association assessments.  As 
Wis. Stat. § 703.165(3) indicates, these unpaid assessments 
constituted a lien against the units.  It is also undisputed 
that Abbey Springs filed a claim for surplus in the foreclosure 
action "based on a 'Statement of Condominium Lien'" it filed 
against the former owners.  Furthermore, the parties agree that 
No. 
2014AP940   
 
12 
 
Walworth State Bank's interest, as the holder of a first 
mortgage on the units, takes priority over Abbey Springs's lien 
based on unpaid assessments.  This position is supported by the 
plain language of Wis. Stat. § 703.165(5)(b), which gives a 
first mortgage holder priority over any lien for unpaid 
assessments that was recorded after the first mortgage.     
¶19 Prioritization of Walworth State Bank's first mortgage 
over Abbey Springs's lien for unpaid assessments is reflected in 
the Foreclosure Judgment entered by the circuit court in the 
foreclosure action.  In that action, the circuit court entered 
default judgment against the unit owners and Abbey Springs.  
Specifically, the circuit court ordered that the defendants, 
including Abbey Springs, "after the filing of the Lis Pendens 
herein, be forever barred and foreclosed of all right, title, 
interest, lien or equity of redemption in and to said mortgaged 
premises . . . ."  Abbey Springs did not appeal the circuit 
court's Foreclosure Judgment. 
¶20 The circuit court's order in the foreclosure action 
that eliminated "all right, title, interest, lien or equity of 
redemption in and to" the property aligns with Chapter 846 of 
the Wisconsin Statutes and the equitable purpose of foreclosure.  
In Wisconsin, and across much of the United States, judicial 
foreclosure is the available method of foreclosure.  1 Grant S. 
Nelson et al., Real Estate Finance Law § 7:12, at 903 (6th ed. 
2014).  Generally speaking, Chapter 846 of the Wisconsin 
Statutes sets forth a two-step procedure that governs the 
foreclosure process.  Shuput v. Lauer, 109 Wis. 2d 164, 171, 325 
No. 
2014AP940   
 
13 
 
N.W.2d 321 (1982).  The first step includes the judgment of 
foreclosure and sale.  Id.  It is during this first step that a 
circuit court determines "the parties' legal rights in the 
underlying mortgage and obligation, including the right to a 
deficiency judgment."  Bank Mut. v. S.J. Boyer Const., Inc., 
2010 WI 74, ¶27, 326 Wis. 2d 521, 785 N.W.2d 462.  Specifically, 
Wis. Stat. § 846.01 addresses the first step in the foreclosure 
process, the foreclosure judgment.  Section 846.01(1) provides, 
in pertinent part: 
[I]n actions for the foreclosure of mortgages upon 
real estate, if the plaintiff recover, the court shall 
render judgment of foreclosure and sale, as provided 
in this chapter, of the mortgaged premises or so much 
of the premises as may be sufficient to pay the amount 
adjudged to be due upon the mortgage and obligation 
secured by the mortgage, with costs. 
Id.  This court has determined that § 846.01(1) "requires the 
court to render judgment of foreclosure and sale in successful 
foreclosure actions."  Bank Mut., 326 Wis. 2d 521, ¶28.  
¶21 The second step in foreclosure actions "carries into 
effect and enforces the judgment of foreclosure and sale."  Id., 
¶27.  That is, after the judgment of foreclosure is entered and 
sale of the property completed, additional statutory proceedings 
take place to confirm the sale, determine the rights to surplus, 
if any, and enter deficiency judgment, if applicable.  See Wis. 
Stats. §§ 846.162, 846.165, 846.167; see also Shuput, 109 
Wis. 2d at 171.   
¶22 In carrying out this two-step process, a circuit court 
ensures that the basic objectives of a foreclosure action are 
No. 
2014AP940   
 
14 
 
met.  Secondary sources and Wisconsin case law have explained 
the objective and function of foreclosure actions in various 
ways:   
The basic objective of an action to foreclose is to 
enable the mortgage creditor to get his debt paid out 
of the security.  To accomplish this end[,] it is the 
purpose of the foreclosure sale to end the right to 
redeem of all persons who have interests in the 
property subject to the mortgage and to vest in the 
purchaser on the sale the title to the property as it 
stood at the time of the execution of the mortgage. 
George E. Osborne, Handbook on the Law of Mortgages § 319, at 
669 (2d ed. 1970).  This court has explained that "the judgment 
of foreclosure and sale determines the rights of the parties and 
disposes of the entire matter in litigation . . . ."  Shuput, 
109 Wis. 2d at 172.  Furthermore, the Restatement (Third) of 
Property addresses the effect of foreclosure actions on lien 
priorities:  "A valid foreclosure of a mortgage terminates all 
interests in the foreclosed real estate that are junior to the 
mortgage being foreclosed and whose holders are properly joined 
or notified under applicable law."  Restatement (Third) of 
Property (Mortgages) § 7.1 (1997) (emphasis added).  In regard 
to the first priority mortgage, this court has explained that, 
generally, "a proper foreclosure proceeding, when confirmed, 
satisfies 
the 
debt 
[if 
there 
are 
sufficient 
funds] 
and 
extinguishes the mortgage."  Winter v. Knaak, 236 Wis. 367, 370, 
294 N.W. 488 (1940).  With regard to the rights of junior 
lienholders such as Abbey Springs, the court of appeals has 
stated: 
No. 
2014AP940   
 
15 
 
[W]hen property is sold at a foreclosure sale, the 
property is transferred to the purchaser who receives 
the interest of the mortgagor and whatever interest 
the other parties to the suit possessed at the 
commencement of the action. As a result, those who 
were parties to the action can no longer assert any 
claim or right of interest against the property. The 
interest of such parties is deemed "foreclosed," 
leaving them to look only to sale proceeds for 
satisfaction of their claim. 
First Wis. Trust Co. v. Rosen, 143 Wis. 2d 468, 472-73, 422 
N.W.2d 128 (Ct. App. 1988) (citations omitted).  In sum, 
secondary sources and Wisconsin case law demonstrate that 
foreclosure 
actions 
are 
designed 
to: 
(1) 
bring 
together 
creditors' claims to a property for disposition in a single 
proceeding; (2) apply proceeds from the foreclosure sale to 
satisfy the liens of those parties to the foreclosure action in 
order of priority; and (3) extinguish unsatisfied junior 
lienholders' rights9 to the property so that title transfers 
unencumbered to the new purchaser.   
¶23 Abbey Springs attempts to evade the effect of the 
Foreclosure Judgment in this case by acknowledging that its lien 
was extinguished in the foreclosure action but claiming that the 
underlying debt——the unpaid assessments——survives due to its 
connection to Units 18 and 19.  Indeed the underlying debt does 
survive and nothing in the Foreclosure Judgment prevents Abbey 
Springs from suing the former unit owners to recover that debt.  
What Abbey Springs is foreclosed from doing is perpetually 
                                                 
9 Junior lienholders' rights are so extinguished when the 
junior lienholders are made parties to the foreclosure action. 
No. 
2014AP940   
 
16 
 
saddling the property and all subsequent owners with debt owed 
by the former unit owners unless and until that debt is paid.  
Not only did the Foreclosure Judgment extinguish the "lien" it 
also "forever barred and foreclosed" all "right" and all 
"interest" of Abbey Springs in and to the property.  The circuit 
court possessed both statutory and equitable power to effectuate 
this comprehensive foreclosure of rights and interests. 
¶24 In carrying out the two-step foreclosure procedure, 
circuit courts are not limited to the powers and duties 
expressly provided in Chapter 846.  "Foreclosure proceedings are 
equitable in nature, and the circuit court has the equitable 
authority to exercise discretion throughout the proceedings."  
GMAC Mortg. Corp. v. Gisvold, 215 Wis. 2d 459, 480, 572 N.W.2d 
466 (1998).  In other words, the foreclosure judgment, in 
accordance with Wis. Stat. § 846.01 as well as the equitable 
authority of the circuit court, determines the rights of the 
parties with interests in the foreclosed property.    
¶25 The purpose of foreclosure law and the statutory 
scheme governing foreclosure in Wisconsin guide our decision.  
As discussed, the purpose of foreclosure is to allow a mortgagee 
to collect what it is owed through, generally speaking, the sale 
of the mortgaged property.  See Osborne, supra § 319, at 669.  
To achieve this purpose, a foreclosure action determines the 
rights of the parties to the subject property and restores "the 
title to the property as it stood at the time of the execution 
of the mortgage."  Id.  Here, but for Walworth State Bank's 
payment of the former owners' unpaid assessments, title would 
No. 
2014AP940   
 
17 
 
not have been so restored because the former owners' debt, which 
Abbey Springs claims survives the foreclosure action, would 
continue to affect the current owners' ability to utilize the 
recreational facilities.  Moreover, Chicago Title Company issued 
a commitment for title insurance to the then-prospective owners 
containing 
an 
exception 
from 
coverage 
for 
the 
unpaid 
assessments.   
¶26 In accordance with Wis. Stat. § 846.01 and its 
equitable powers, the circuit court eliminated all rights of 
Abbey Springs and the former owners to the property in the 
foreclosure action.  However, Abbey Springs's Membership and 
Guest Policy contravenes the circuit court's order in the 
foreclosure action by reviving an interest in the units that the 
circuit court eliminated.  The policy does so because unpaid 
assessments attributable to the units remain attributable to the 
units even after foreclosure.  This is contrary to both the 
judgment of foreclosure, which eliminated not only the lien but 
all of Abbey Springs's rights and interests in and to the 
property in question, and well-established foreclosure law.  As 
a result, the condominium policy as applied in this case 
violates both the purpose of foreclosure and the circuit court's 
Foreclosure Judgment. 
¶27 The fact that Walworth State Bank had no legal 
obligation to pay the former owners' outstanding assessments 
after foreclosure does not change our decision.  The connection 
Walworth State Bank had to the outstanding assessments was 
through its ownership of the property after purchase at the 
No. 
2014AP940   
 
18 
 
sheriff's sale.  Abbey Springs's policy improperly tethers the 
unpaid assessments to the unit itself by prohibiting subsequent 
owners from utilizing the recreational facilities.  This is an 
assertion of a right against the property itself regardless of 
whether or not Abbey Springs would have been able to legally 
collect the unpaid assessments from Walworth State Bank or a 
later owner.  We agree with the dissent that "a lien cannot 
exist independent of a debt."  Dissent, ¶56.  However, here, as 
we have explained, Abbey Springs's policy ties the unpaid 
assessment debt——owed by the former owners of the units——to the 
units themselves, thereby impermissibly reviving an interest 
extinguished by the foreclosure action.  The dissent disregards 
the fact that 
not only were 
liens extinguished by the 
Foreclosure Judgment but also "all right, title, interest, lien 
or equity of redemption" were also eliminated. 
¶28 Additionally, contrary to the court of appeals' 
suggestion 
otherwise, 
Abbey 
Springs's 
policy 
cannot 
be 
characterized as a pay-to-play policy because it requires the 
new owners to continue to pay monthly assessments for the 
recreational facilities regardless of whether or not they use 
the facilities or are prohibited from using them.  Under the 
Bylaws, new owners must continue to pay monthly assessments for 
the recreational facilities even if the Membership and Guest 
Policy prohibits them from setting foot in 
any of the 
recreational 
facilities 
due 
to 
the 
prior 
owners' 
unpaid 
assessments.  If the Membership and Guest Policy prohibited only 
current owners from utilizing recreational facilities when those 
No. 
2014AP940   
 
19 
 
current owners failed to pay assessments, we might be able to 
characterize the policy as a pay-to-play policy.  However, the 
Bylaws require owners to pay assessments for the recreational 
facilities while, at the same time, the Membership and Guest 
Policy prohibits owners from using the recreational facilities 
based on the unpaid assessments of prior owners.  This is not a 
pay-to-play policy. 
¶29 We recognize that condominium owners are often subject 
to a variety of enforceable use restrictions imposed under the 
declaration and bylaws pertaining to their units.  See, e.g., 
Wis. Stats. §§ 703.09(1)(g), 703.10(3).  However, we disagree 
with the dissent's assertion that under our holding no use 
restriction imposed by a condominium or homeowners association 
could survive a foreclosure action.  See dissent, ¶¶67-69.  Our 
holding does not extend to enforceable use restrictions and is 
far more narrow than the dissent suggests.  Abbey Springs's 
Membership and Guest Policy cannot survive a foreclosure action 
to the extent it restricts a current owner's use of certain 
recreational facilities based on the failure of the prior owners 
to pay their debts.  Such a policy ties the debts of the prior 
owners 
to 
the 
units, 
in 
violation 
of 
well-established 
foreclosure law as reflected in the Foreclosure Judgment.  A use 
restriction that prohibits dogs on condominium property, for 
example, would not depend on a prior owner's actions and would 
not result in a foreclosed debt forever haunting a particular 
unit instead of following the prior owners to whom the debt 
belongs.  The same could be said about the use restriction on 
No. 
2014AP940   
 
20 
 
renting upheld by Apple Valley Gardens Ass'n, Inc. v. MacHutta, 
2009 WI 28, ¶3, 316 Wis. 2d 85, 763 N.W.2d 126.10  The dissent 
disregards the obvious fact that enforceable use restrictions 
generally apply to all property owners equally and not just to 
those who have the misfortune of purchasing units from prior 
owners who left unpaid debts behind. 
III.  Conclusion 
¶30 We hold that Abbey Springs's Membership and Guest 
Policy 
violates 
well-established 
foreclosure 
law 
and 
the 
Foreclosure Judgment entered against Abbey Springs.  It does so 
by tethering unpaid condominium assessments to the units, which 
effectively results in Abbey Springs asserting a right against 
the property that the Foreclosure Judgment eliminated.  Under 
the undisputed facts, Walworth State Bank is entitled to summary 
judgment as a matter of law.  Accordingly, we reverse the court 
                                                 
10 Comparing the policy at issue in this case with the 
rental restriction at issue in Apple Valley Gardens Ass'n, Inc. 
v. MacHutta, 2009 WI 28, 316 Wis. 2d 85, 763 N.W.2d 126, is not 
helpful considering that Apple Valley did not involve a 
foreclosed property or even a sale of a property.  Id., ¶9.  In 
Apple Valley we rejected the argument that a restriction on 
renting must appear in a condominium's declaration, rather than 
its bylaws, in order to be valid.  Id., ¶¶1, 3.  We also held 
that the specific condominium declaration at issue did not 
create a right to rent and that a restriction on renting did not 
render title unmarketable under Wis. Stat. § 703.10(6).  Id., 
¶3.  Our holding that the rental restriction at issue in Apple 
Valley was valid has no bearing on the application of the 
Membership and Guest Policy in the context of the foreclosed 
units. 
No. 
2014AP940   
 
21 
 
of appeals and remand to the circuit court to enter an order 
consistent with our opinion. 
By the Court.—The decision of the court of appeals is 
reversed, and the cause is remanded to the circuit court for 
further proceedings consistent with this opinion. 
 
 
 
No.  2014AP940.ssa 
 
1 
 
 
¶31 SHIRLEY S. ABRAHAMSON, J.   (dissenting).  I agree 
with the result reached by the court of appeals.  The majority 
opinion asserts that Abbey Springs' policy violates "well-
established foreclosure law."1  Asserting that something is 
"well-established" does not mean it is, in fact, "well-
established." 
 
The 
majority 
opinion 
fails 
to 
prove 
its 
assertion.   
¶32 Let's look at the facts.  Abbey Springs, a condominium 
association, adopted a policy barring an owner of a condominium 
unit from using certain recreational facilities if "regular 
monthly or special assessment[s]" are more than 90 days past 
due, unless the unpaid assessments (including a prior owners' 
unpaid assessments) are paid. 
¶33 Abbey Springs' policy provides in relevant part:  
If any regular monthly or special assessment against 
any Unit is delinquent for more than ninety (90) days 
past its due date, the owner or owners of that Unit, 
and any subsequent owners, shall automatically and 
without notice be suspended from any use or occupation 
of the Yacht Club, Clubhouse Grille, Pool Café, 
fitness 
facilities, 
golf 
facilities, 
and 
boat 
launching facilities, until such time as assessments 
are paid in full.   
Majority op., ¶4.   
¶34 In the instant case, the previous owners of the two 
condominium units at issue were delinquent in paying their 
mortgage and their assessments.  Walworth State Bank, the 
mortgagee, brought a foreclosure action naming the unit owners 
                                                 
1 See majority op., ¶¶2, 13 n.7, 16, 26, 29, 30.   
No.  2014AP940.ssa 
 
2 
 
and Abbey Springs as defendants.  Abbey Springs was named as a 
defendant 
because 
Abbey 
Springs 
had 
a 
lien 
for 
unpaid 
assessments secured against the units pursuant to Wis. Stat. 
§ 703.165(3).2   
¶35 The 
circuit 
court 
entered 
a 
judgment 
in 
the 
foreclosure action providing that the owners of the foreclosed 
units and Abbey Springs and all persons claiming under them were 
"forever barred and foreclosed of all right, title, interest, 
lien or equity of redemption" in and to the units.  Walworth 
State Bank bought the units at issue in a sheriff's sale.   
¶36 The question presented is whether Abbey Springs' 
policy barring an owner of a condominium unit from using certain 
                                                 
2 Wisconsin Stat. § 703.165(3) states:  
All assessments, until paid, together with interest on 
them and actual costs of collection, constitute a lien 
on the units on which they are assessed, if a 
statement of lien is filed within 2 years after the 
date the assessment becomes due.  The lien is 
effective against a unit at the time the assessment 
became due regardless of when within the 2-year period 
it is filed.  A statement of condominium lien is filed 
in the land records of the clerk of circuit court of 
the county where the unit is located, stating the 
description of the unit, the name of the record owner, 
the amount due and the period for which the assessment 
was due.  The clerk of circuit court shall index the 
statement of condominium lien under the name of the 
record owner in the judgment and lien docket.  The 
statement of condominium lien shall be signed and 
verified by an officer or agent of the association as 
specified in the bylaws and then may be filed.  On 
full payment of the assessment for which the lien is 
claimed, the unit owner shall be entitled to a 
satisfaction of the lien that may be filed with the 
clerk of circuit court. 
No.  2014AP940.ssa 
 
3 
 
recreational 
facilities 
if 
"regular 
monthly 
or 
special 
assessment[s]" are more than 90 days past due, unless the unpaid 
assessments (including a prior owners' delinquent assessments) 
are paid, may be enforced against the purchaser of the 
condominium units following a foreclosure sale.  For ease of 
discussion, I will refer to this policy restricting access to 
the recreational facilities as "Abbey Springs' recreational use 
policy." 
¶37 The majority opinion asserts that Abbey Springs' 
recreational use policy violates Wisconsin law in two respects: 
1. 
Abbey Springs' recreational use policy "impermissibly 
revives a lien on the condominium units that was 
eliminated by the foreclosure action."  See majority 
op., ¶1. 
2. 
Abbey Springs' recreational use policy violates the 
circuit court's order for judgment on foreclosure.  
The judgment eliminated "all right, title, interest, 
lien or equity of redemption" of Abbey Springs in and 
to the foreclosed units.  See majority op., ¶¶2, 30. 
¶38 Everyone agrees that the statutory lien against the 
units for the unpaid assessments was extinguished in the 
foreclosure action.3  Everyone agrees that a purchaser of the 
units at issue is not personally liable for prior unpaid 
assessments.4   
                                                 
3 See majority op., ¶¶16-29.   
4 See majority op., ¶¶2, 27 
No.  2014AP940.ssa 
 
4 
 
¶39 Although the statutory lien is gone and the new owners 
of the units are not personally liable for prior unpaid 
assessments, the majority opinion states (in conclusory fashion 
and 
without 
citation 
to 
authority) 
that 
Abbey 
Springs' 
recreational use policy "impermissibly revives a lien on the 
condominium units that was eliminated by the foreclosure 
action,"5 "improperly tethers the unpaid assessments to the unit 
itself,"6 and asserts "a right against the property."7    
¶40 I disagree with the majority opinion.  This "revived," 
"tethered," resurrected lien "haunting a particular unit" is a 
figment of the majority opinion's imagination not traceable to 
any statute or common law principle.  The statutory lien is 
gone; no lien exists to haunt, or to be revived, tethered, or 
resurrected.     
¶41 Nevertheless, the majority opinion concludes that 
Abbey Springs' recreational use policy amounts to Abbey Springs' 
claiming a "right, title, interest, lien or equity of redemption 
in and to" the foreclosed units that was barred by the judgment 
of foreclosure.  The majority opinion does not explain what 
"right, title, interest, lien or equity of redemption in and to" 
the foreclosed units Abbey Springs is claiming.  The majority 
opinion cannot explain itself because Abbey Springs is not 
                                                 
5 Majority op., ¶1.   
6 Majority op., ¶27.   
7 Majority op., ¶¶27, 30. 
No.  2014AP940.ssa 
 
5 
 
claiming a "right, title, interest, lien or equity of redemption 
in and to" the foreclosed units.          
¶42 With respect to the judgment of foreclosure, Abbey 
Springs does not claim a lien on the foreclosed units.  Abbey 
Springs' recreational use policy does not in any way revive the 
extinguished lien.   
¶43 Abbey Springs does not claim an equity of redemption 
in and to the foreclosed units.   
¶44 Abbey Springs is not using its recreational use policy 
to claim a right, title, or interest in and to the foreclosed 
units.  Abbey Springs is, as several briefs point out, using 
access to the recreational facilities, which are not common 
elements of the condominium at issue, as "leverage to compel 
satisfaction of all [assessments in] arrears."8     
¶45 Restrictions on the use of the unit itself are 
permissible under Wisconsin law.9  If use of the unit may be 
restricted, surely a restriction on the use of the association's 
recreational facilities is permissible, even if used as leverage 
to compel the payment of delinquent assessments.   
¶46 In Part II, below, I conclude that Abbey Springs' 
recreational use policy does not affect the marketable title to 
the units.   
                                                 
8 See Highland Lakes Country Club & Cmty. Ass'n v. Franzino, 
892 A.2d 646, 655 (N.J. 2006) (allowing the use of such leverage 
in a similar situation). 
9 See Apple Valley Gardens Ass'n, Inc. v. MacHutta, 2009 WI 
28, ¶18, 316 Wis. 2d 85, 763 N.W.2d 126; accord Wis. Stat. 
§ 703.10(1), (3). 
No.  2014AP940.ssa 
 
6 
 
¶47 In 
sum, 
the 
majority 
opinion 
contravenes 
basic 
principles 
of 
real 
property 
law, 
foreclosure 
law, 
and 
condominium law.   
¶48 For the reasons set forth, I would affirm the court of 
appeals and hold that Abbey Springs' recreational use policy is 
enforceable. 
I 
¶49 Condominium associations' expenses are funded largely 
through "assessments," which an association may levy among unit 
owners.  See Wis. Stat. § 703.16(2)(a).     
¶50  The 
significant 
problem 
posed 
for 
condominium 
associations by unpaid assessments is the issue underlying the 
instant case.      
¶51 The 
problem, 
simply 
stated, 
is 
that 
unless 
a 
condominium association can recover delinquent assessments from 
the delinquent unit owner (or, under a policy such as Abbey 
Springs has adopted, from a subsequent owner), the cost of the 
delinquent assessments will be passed on to the owners of other 
condominium units.  As a Report of the Joint Editorial Board for 
Uniform Real Property Acts explained: 
If some owners do not pay their proportionate share of 
common expenses, the association will be forced to 
shift the burden of delinquent assessments to the 
remaining unit owners through increased assessments or 
No.  2014AP940.ssa 
 
7 
 
reduced 
services 
and 
maintenance, 
potentially 
threatening property values within the community.10   
¶52 To enable a condominium association to collect unpaid 
assessments, Wis. Stat. § 703.165(3) creates a lien on a unit 
for certain unpaid assessments.11  This statutory lien was 
extinguished in the foreclosure action.12  Everybody agrees the 
statutory lien is extinguished.  No ifs, ands, or buts.       
¶53 To further address the problem of unpaid assessments 
and 
the 
limitations 
of 
the 
statutory 
lien 
for 
unpaid 
assessments, Abbey Springs adopted its recreational use policy, 
restricting access to Abbey Springs' recreational facilities as 
leverage to compel a unit owner to pay a prior owner's 
delinquent assessments.  Everyone, including Walworth State 
Bank, was notified of Abbey Springs' recreational use policy.   
¶54 The 
parties 
agree, 
and 
the 
majority 
opinion 
acknowledges, that under Abbey Springs' recreational use policy, 
                                                 
10 The Six-Month 'Limited Priority Lien' for Association 
Fees Under the Uniform Common Interest Ownership Act, at 1 (June 
1, 
2013), 
available 
at 
http://www.uniformlaws.org/shared/docs/jeburpa/2013jun1_JEBURPA_
UCIOA%20Lien%20Priority%20Report.pdf; 
see 
also 
Wisconsin 
Condominium Law Handbook, § 5.36 (4th ed. 2013). 
11 Wisconsin Stat. § 703.165 provides, among other things, 
that owners are liable for all assessments "coming due while 
owning a unit" and that "[a]ll assessments, until paid, together 
with interest on them and actual costs of collection, constitute 
a lien on the units on which they are assessed, if a statement 
of lien is filed within 2 years after the date the assessment 
becomes due."  Wis. Stat. § 703.165(2), (3) (emphasis added).  
This lien is inferior to a first mortgage.  See Wis. Stat. 
§ 703.165(5)(b). 
12 See majority op., ¶23.   
No.  2014AP940.ssa 
 
8 
 
an owner of a unit "ha[s] no legal obligation to pay the former 
owners' outstanding assessments after foreclosure . . . ."13  In 
other words, Walworth State Bank (and any person purchasing the 
units from the Bank) is not liable for the prior owner's unpaid 
assessments.14  Refusing to pay the prior owner's delinquent 
assessments results only in the new owner's exclusion from Abbey 
Springs' recreational facilities. 
¶55 Nevertheless, the majority opinion concludes that 
Abbey Springs' recreational use policy "impermissibly revives a 
lien on the condominium units that was eliminated by the 
foreclosure action."15 
¶56 No lien was revived under Abbey Springs' recreational 
use policy.  The "well-established law" is that a lien cannot 
exist independent of a debt.16   A lien secures payments for 
                                                 
13 Majority op., ¶27.   
14 See Walworth State Bank v. Abbey Springs Condo. Ass'n, 
Inc., No. 2014AP940, unpublished slip op., ¶18 (Wis. Ct. App. 
Mar. 26, 2015) ("Nothing in Abbey Springs' policy gave Abbey 
Springs the right to pursue recovery of the unpaid assessments 
from [the Bank]."). 
15 Majority op., ¶1.   
16 Dorr v. Sacred Heart Hosp., 228 Wis. 2d 425, 437, 597 
N.W.2d 462 (Ct. App. 1999) (defining a lien as "a 'Qualified 
right of property which a creditor has in or over specific 
property of his debtor . . . .'  Because a lien is a right to 
encumber property until a debt is paid, it presupposes the 
existence of a debt.") (quoting Black's Law Dictionary 832 (5th 
ed. 1979)) (emphasis in original).   
This court has endorsed Dorr's analysis of a lien, stating:  
Dorr's analysis began with the proposition that a lien 
"presupposes the existence of a debt."  228 Wis. 2d at 
(continued) 
No.  2014AP940.ssa 
 
9 
 
debts due the lienholder and facilitates the satisfaction of 
that obligation.   
¶57 The 
majority 
opinion 
acknowledges 
this 
"well-
established" law, but does not recognize its importance in the 
instant case.17   
¶58 In the instant case, Walworth State Bank and the new 
owners of the foreclosed units are not indebted to Abbey Springs 
for the past owners' unpaid assessments.  The new owners are not 
personally 
liable 
to 
Abbey 
Springs 
for 
any 
past 
unpaid 
assessments.  The prior owners of the units remain indebted to 
Abbey Springs for unpaid assessments they incurred while 
owners.18  Stated simply, the foreclosure action severed the debt 
of the prior owners for unpaid assessments from the collateral; 
the debt remained that of the prior owners and the collateral 
was gone.    
¶59 The majority opinion invents a "straw lien" and then 
blows it down, concluding that Abbey Springs' recreational use 
                                                                                                                                                             
437, 587 N.W.2d 462.  That proposition is deeply 
rooted in our jurisprudence, see Boorman v. Wis. 
Rotary Engine Co., 36 Wis. 207, 212-13 (1874), and 
widely accepted.  See 51 Am. Jur. 2d Liens § 13 
(2011).   
Gister v. Am. Family Mut. Ins. Co., 2012 WI 86, ¶51, 342 
Wis. 2d 496, 818 N.W.2d 880. 
17 Majority op., ¶27.   
18 See majority op., ¶23; see also Badger III Ltd. P'ship v. 
Howard, Needles, Tammen & Bergendoff, 196 Wis. 2d 891, 898-99, 
539 N.W.2d 904 (Ct. App. 1995) (recognizing that a debt 
unsatisfied in a foreclosure action and sheriff's sale survives 
the foreclosure). 
No.  2014AP940.ssa 
 
10 
 
policy violates "well-established foreclosure law."19  The 
majority 
opinion 
does 
not 
explain 
what 
"well-established 
foreclosure 
law" 
Abbey 
Springs' 
recreational 
use 
policy 
violates. 
¶60 I turn now to the second rationale of the majority 
opinion:  Abbey Springs' recreational use policy violates the 
circuit court's order for judgment on foreclosure.  The judgment 
eliminated "all right, title, interest, lien or equity of 
redemption" of Abbey Springs in and to the foreclosed units.  
See majority op., ¶¶2, 30. 
¶61 I agree with the majority opinion that the five 
elements of the foreclosure judgment——right, title, interest, 
lien, and equity of redemption——should be analyzed.20  I have 
already explained that Abbey Springs does not claim, and is not 
entitled to claim, a lien in and to the foreclosed units.  Nor 
does Abbey Springs claim an equity of redemption in and to the 
foreclosed units.  So what right, title, or interest does Abbey 
Springs claim in and to the foreclosed units? 
¶62 The answer is that Abbey Springs does not claim any 
right, title, or interest in and to the foreclosed units.  Abbey 
Springs' recreational use policy restricts the unit owners' 
access to certain recreational facilities, as several briefs 
claim, as leverage to compel satisfaction of all assessments in 
arrears.     
                                                 
19 Majority op., ¶2.   
20 See majority op., ¶27.   
No.  2014AP940.ssa 
 
11 
 
¶63 If an owner wants to live in a condominium unit at 
Abbey Springs without using the recreational facilities, the 
owner need not pay any prior owner's delinquent assessments.21   
¶64 A restriction on the use of recreational facilities 
used as leverage to compel satisfaction of all assessments in 
arrears is not, as the majority opinion claims, a right, title, 
or interest by Abbey Springs in and to the foreclosed units.22  
This court has allowed condominium associations to restrain an 
owner's use of a unit.  If a condominium association can 
restrict an owner's use of a unit, it surely can restrict the 
use of recreational facilities.   
¶65 In Apple Valley Gardens Ass'n, Inc. v. MacHutta, 2009 
WI 28, ¶24, 316 Wis. 2d 85, 763 N.W.2d 126, the court held that 
a restriction on renting units was a "reasonable rule[ or] 
regulation[] governing the use of the units."   
¶66 An association's prohibition on the rental of a 
condominium unit is permissible under Wis. Stat. § 703.10(1) and 
(3), which permit a condominium association to adopt rules or 
amend 
its 
bylaws 
to 
impose 
restrictions 
or 
requirements 
                                                 
21 The owners, like other condominium owners, will still be 
responsible for paying assessments coming due while they own the 
unit.  They will not be responsible for any prior owners' 
delinquent assessments.  See Wis. Stat. § 703.165(2) ("A unit 
owner shall be liable for all assessments, or installments 
thereof, coming due while owning a unit . . . .").   
22 See majority op., ¶27.    
No.  2014AP940.ssa 
 
12 
 
respecting the use of the units.23  If the rental restriction on 
the use of a unit does not violate the right, title, or interest 
of an owner of a unit, surely a restriction or requirement 
limiting the use of recreational facilities24 does not violate 
the right, title, or interest of an owner of a unit.25   
                                                 
23 Wisconsin 
Stat. 
§ 703.10(1) 
(with 
added 
emphasis) 
provides: "The administration of every condominium shall be 
governed by bylaws.  Every unit owner shall comply strictly with 
the bylaws and with the rules adopted under the bylaws, as the 
bylaws 
or 
rules 
are 
amended 
from 
time 
to 
time . . . ."  
Wisconsin Stat. § 703.10(3) provides:  "The bylaws also may 
contain any other provision regarding the management and 
operation of the condominium, including any restriction on or 
requirement respecting the use and maintenance of the units and 
the common elements."   
See also Wis. Stat. § 703.15(1), which provides that the 
association's 
board 
of 
directors 
generally 
governs 
the 
association's affairs.  The association has the power to, among 
other things, "[e]xercise any other power conferred by the 
condominium 
instruments 
or 
bylaws." 
 
See 
Wis. 
Stat. 
§ 703.15(3)(a)4.     
The condominium association is created by a declaration on 
file with the register of deeds, bylaws, and policies adopted by 
the board of directors.  See Wis. Stat. §§ 703.01(8), 703.07(1), 
703.09, 703.10(1); Wisconsin Condominium Law Handbook, § 5.2 
(4th ed. 2013).     
24 Underscoring this conclusion, Abbey Springs' recreational 
facilities are not common elements of the condominium in which 
the units at issue are located.  See majority op., ¶3.   
25 The Wisconsin Condominium Law Handbook, § 5.50 (4th ed. 
2013), describes Apple Valley as "indicat[ing] that restrictions 
do not violate the provisions of the Condominium Ownership Act 
and impl[ying] that broader restrictions may be enforceable.  In 
addition, the decision extends to the rules and regulations as a 
source of restrictions."  Abbey Springs' recreational use policy 
is one such rule or regulation.   
No.  2014AP940.ssa 
 
13 
 
¶67 A 
logical 
extension 
of 
the 
majority 
opinion's 
conclusion that Abbey Springs' recreational use policy violates 
the judgment of foreclosure is that restrictions on the use of a 
unit by a condominium association in its declaration, bylaws, or 
policies (or similar restrictions adopted by a homeowner's 
association) do not survive a judgment of foreclosure.   
¶68 Under 
this 
reading 
of 
the 
majority 
opinion, 
a 
restriction on renting condominium units contained in the 
association's bylaws would not survive a foreclosure action, 
because it perpetually saddles the property and all subsequent 
owners with the restriction on renting.26  This court concluded 
in Apple Valley, however, that such restrictions on renting are 
permissible, see 316 Wis. 2d 85, ¶31, and the court of appeals 
has recognized that such restrictions remain in force even after 
a foreclosure.  See Bankers Tr. Co. of Cal. v. Bregant, 2003 WI 
App 86, ¶15, 261 Wis. 2d 855, 661 N.W.2d 498 (recognizing that 
although an action to enforce a bylaw restriction on rental was 
premature, 
it 
was 
"uncontroverted 
that . . . the 
bylaw 
restriction of owner-occupancy was enforceable" following a 
foreclosure sale).   
¶69 Moreover, under this logical extension of the majority 
opinion, 
restrictions 
imposed 
by 
homeowners' 
associations 
regarding, for instance, repair and maintenance of a home, 
architecture of homes, or the placement of homes would similarly 
be imperiled by a foreclosure action.  Courts have concluded 
                                                 
26 See majority op., ¶23.   
No.  2014AP940.ssa 
 
14 
 
that restrictions imposed by a homeowners' association survive a 
foreclosure sale.  See Thirteen S. Ltd. v. Summit Vill., Inc., 
866 P.2d 257, 261 (Nev. 1993) (holding that a homeowners' 
association's covenants, conditions, and restrictions were not 
extinguished in a tax foreclosure sale). 
¶70 The majority opinion disavows this logical extension 
of its holding, stating that restrictions like "[a] use 
restriction that prohibits dogs on condominium property . . ." 
are permissible because they do not "depend on a prior owner's 
actions and would not result in a foreclosed debt forever 
haunting a particular unit instead of following the prior owners 
to whom the debt belongs."27  The majority opinion continues, 
asserting that such restrictions are permissible because they 
"generally apply to all property owners equally and not just to 
those who have the misfortune of purchasing units from prior 
owners who left unpaid debts behind."28   
¶71 This line of reasoning is flawed for several reasons.   
¶72 First, as I have explained above, Abbey Springs' 
recreational use policy does not create a spectral debt, 
"haunting" the unit until paid.  A subsequent owner is free to 
pay or not pay the prior owner's past due assessments.   
¶73 Second, 
Abbey 
Springs' 
recreational 
use 
policy, 
despite the majority opinion's view, does "generally apply to 
                                                 
27 Majority op., ¶29.   
28 Majority op., ¶29.   
No.  2014AP940.ssa 
 
15 
 
all property owners equally . . . ."29 That is, all unit owners 
are subject to the same restriction, and any unit owners 
(regardless of how they purchased the unit) will be barred from 
the recreational facilities if there are unpaid assessments 
against the unit.   
¶74 Third, and importantly, a purchaser buys a condominium 
unit on notice of the condominium association's (or homeowners' 
association's) declaration, bylaws, and policies.  Prospective 
purchasers who want to use the recreational facilities and are 
unhappy about paying past due assessments may choose to purchase 
the unit at a lower price or may chose to buy a different 
property.  Although the majority opinion characterizes this 
situation as a "misfortune,"30 the buyer has a choice.   
¶75 For the reasons stated, I conclude that Abbey Springs' 
recreational use policy does not constitute a lien on the 
foreclosed 
units 
and 
does 
not 
violate 
the 
judgment 
of 
foreclosure.   
II 
¶76 Finally, addressing an argument made by Walworth State 
Bank (and not resolved by the majority opinion),31 I conclude 
that Abbey Springs' recreational use policy does not render 
title to the foreclosed units unmarketable.   
                                                 
29 Majority op., ¶29.   
30 See majority op., ¶29 
31 See majority op., ¶13 n.7.   
No.  2014AP940.ssa 
 
16 
 
¶77 Title is marketable if it "can be held in peace and 
quiet; not subject to litigation to determine its validity; not 
open to judicial doubt."  Apple Valley, 316 Wis. 2d 85, ¶27 
(quotation omitted).   
¶78 Walworth State Bank argues that it is entitled to 
summary judgment on its declaratory judgment action because 
Abbey Springs' policy renders the "title [to the foreclosed 
units] unmarketable, or at the very least, adversely affects its 
marketability."   
¶79 Wisconsin 
Stat. 
§ 703.10(6) 
prohibits 
condominium 
bylaws from affecting the transfer of title to a condominium 
unit. 
 
Wisconsin 
Stat. 
§ 703.10(6) 
states: 
"Title 
to 
a 
condominium unit is not rendered unmarketable or otherwise 
affected by any provision of the bylaws or by reason of any 
failure of the bylaws to comply with the provisions of this 
chapter."   
¶80 This provision is "a protection of the title and is 
not a vehicle for a finding of impairment."  Apple Valley, 316 
Wis. 2d 85, ¶29 (citing Bankers Tr., 261 Wis. 2d 855, ¶¶18-19) 
(emphasis added).    
¶81 Nevertheless, Walworth State Bank argues that Abbey 
Springs' recreational use policy affects the quality of the 
unit's title and its marketability.   
¶82 In Apple Valley, we addressed whether a condominium 
bylaw prohibiting the rental of a condominium unit rendered the 
unit's title unmarketable.  The Apple Valley court determined 
that although the rental restriction affected the use of the 
No.  2014AP940.ssa 
 
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property, it did not affect the owner's ability to convey title.  
Apple Valley, 316 Wis. 2d 85, ¶28.   
¶83 The same is true in the instant case.  Although 
Walworth State Bank presented evidence that Abbey Springs' 
recreational use policy reduced the market value of the units, 
it presented no evidence that the restriction affected Walworth 
State Bank's ability to convey its title.   
¶84 Walworth State Bank has not presented any evidence 
that the unavailability of the recreational facilities, which 
were not part of the common areas and were available only for an 
additional cost, rendered the title to the foreclosed units 
unmarketable.   
¶85 Following the foreclosure, Walworth State Bank took 
title to the units free and clear of "'all right, title, 
interest, lien or equity of redemption' in and to the 
property."32   
¶86 Abbey Springs' recreational use policy simply allows 
Abbey Springs to exclude an owner from access to Abbey Springs' 
recreational facilities unless delinquent assessments are paid.  
It does not affect the owner's ability to convey title.   
* * * * 
¶87 Because I conclude that Abbey Springs' policy does not 
violate 
"well-established 
foreclosure 
law" 
or 
"effectively 
revive[] a lien against" the units, and that Walworth State Bank 
took title to the units following the foreclosure free of "all 
                                                 
32 Majority op., ¶6 (quoting the foreclosure judgment).   
No.  2014AP940.ssa 
 
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right, title, interest, lien or equity of redemption" held by 
Abbey Springs, I would affirm the court of appeals and remand to 
the circuit court with instructions to grant summary judgment in 
favor of Abbey Springs.   
¶88 For the reasons set forth, I dissent and write 
separately.    
¶89 I am authorized to state that Justice ANN WALSH 
BRADLEY joins this dissent. 
 
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