Title: Kenosha Hospital & Medical Center v. Jesus E. Garcia

State: wisconsin

Issuer: Wisconsin Supreme Court

Document:

2004 WI 105 
 
 
 
SUPREME COURT OF WISCONSIN 
 
 
 
 
 
CASE NO.: 
02-1727 
COMPLETE TITLE: 
 
 
Kenosha Hospital & Medical Center,  
          Plaintiff-Respondent, 
 
     v. 
 
Jesus E. Garcia,  
          Defendant, 
 
Richter Industries, Inc.,  
          Garnishee-Defendant-Appellant- 
          Petitioner. 
 
 
 
 
REVIEW OF A DECISION OF THE COURT OF APPEALS 
2003 WI App 142 
Reported at: 265 Wis. 2d 900, 667 N.W.2d 851 
(Ct. App. 2003-Published) 
 
 
OPINION FILED: 
July 8, 2004   
SUBMITTED ON BRIEFS: 
        
ORAL ARGUMENT: 
December 17, 2003   
 
 
SOURCE OF APPEAL: 
 
 
COURT: 
Circuit   
 
COUNTY: 
Kenosha   
 
JUDGE: 
David M. Bastianelli   
 
 
 
JUSTICES: 
 
 
CONCURRED: 
        
 
DISSENTED: 
WILCOX, J., dissents (opinion filed).   
 
NOT PARTICIPATING:         
 
 
 
ATTORNEYS: 
 
For the garnishee-defendant-appellant-petitioner there were 
briefs by Christopher W. Rose and Rose & Rose, Kenosha, and oral 
argument by Christopher W. Rose. 
 
For the plaintiff-respondent there was a brief by Ronald L. 
Diersen and Rizzo & Diersen, S.C., Kenosha, and oral argument by 
Ronald L. Diersen. 
 
2004 WI 105 
NOTICE 
This opinion is subject to further 
editing and modification.  The final  
version will appear in the bound 
volume of the official reports. 
 
 
   
No.  02-1727  
(L.C. No. 
01 CV 663) 
STATE OF WISCONSIN  
 
 
   : 
IN SUPREME COURT 
 
 
Kenosha Hospital & Medical Center,  
 
          Plaintiff-Respondent, 
 
     v. 
 
Jesus E. Garcia,  
 
          Defendant, 
 
Richter Industries, Inc.,  
 
          Garnishee-Defendant-Appellant- 
          Petitioner. 
 
FILED 
 
JUL 8, 2004 
 
Cornelia G. Clark 
Clerk of Supreme Court 
 
 
 
 
 
REVIEW of a decision of the Court of Appeals.  Reversed and 
remanded.   
 
¶1 
SHIRLEY S. ABRAHAMSON, C.J.   This is a review of a 
published decision of the court of appeals affirming the 
judgment and order of the Circuit Court for Kenosha County, 
David M. Bastianelli, Judge.1  The circuit court granted a  
                                                 
1 Kenosha Hosp. & Med. Ctr. v. Garcia, 2003 WI App 142, 265 
Wis. 2d 900, 667 N.W.2d 851. 
No. 
02-1727   
 
2 
 
judgment in favor of the creditor, Kenosha Hospital and Medical 
Center, against the garnishee, Richter Industries, Inc., for the 
unpaid debt of the debtor, Jesus E. Garcia.  The circuit court 
also entered an order denying Richter Industries' motion to 
vacate the judgment. 
¶2 
The court of appeals affirmed the judgment of the 
circuit court, concluding that the notice of motion for judgment 
was 
properly 
served 
upon 
the 
garnishee, 
satisfying 
the 
requirements of Wis. Stat. § 801.14(2) (2001-02)2 pertaining to 
the service of pleadings and other papers after an action has 
been commenced.3  The court of appeals further concluded that the 
automatic stay provisions for bankruptcy provided under 11 
U.S.C. § 362(a) did not prohibit Kenosha Hospital from pursuing 
a 
claim 
against 
the 
garnishee 
Richter 
Industries 
under 
Wis. Stat. § 812.41 because the garnishment action gave rise to 
a new and independent claim against the garnishee.4  The court of 
appeals further held that the circuit court did not erroneously 
exercise its discretion in refusing to vacate the judgment.5 
¶3 
Three questions are presented by Richter Industries: 
(1) When a creditor (here Kenosha Hospital) commences an 
earnings garnishment action under Wis. Stat. § 812.35, 
                                                 
2 All references to the Wisconsin statutes are to the 2001-
02 statutes unless otherwise indicated. 
3 Kenosha Hosp., 265 Wis. 2d 900, ¶¶9, 21. 
4 Id. at ¶21. 
5 Id. 
No. 
02-1727   
 
3 
 
must service of the notice of motion for judgment 
against 
the 
garnishee-employer 
(here 
Richter 
Industries) for liability under § 812.41 be served on 
the garnishee under § 801.11(5), or may service be 
made under § 801.14(2)? 
(2) Did the circuit court err in refusing to vacate the 
judgment against the employer-garnishee?   
(3) May a circuit court enter a judgment against an 
employer-garnishee in an earnings garnishment action 
when the debtor (here Garcia) has filed a petition in 
bankruptcy and there is an automatic stay under 11 
U.S.C. § 362(a)? 
¶4 
For the reasons set forth, we reverse the decision of 
the court of appeals and answer the questions presented as 
follows: 
(1) Wisconsin Stat. § 801.11(5) governs service of the 
notice of motion for judgment under § 812.41, and 
service in the present case did not, on the record 
before us, satisfy § 801.11(5). 
(2) Because the circuit court did not apply the proper law 
relating to service, it erred in refusing to vacate 
the judgment.  
(3) The automatic stay provisions of 11 U.S.C. § 362(a) 
did not bar a judgment against the garnishee Richter 
Industries for the amount of the debtor's debt. 
I 
No. 
02-1727   
 
4 
 
¶5 
The facts of this case are not in dispute and are set 
forth here and in the decision of the court of appeals.  Jesus 
E. Garcia became indebted to Kenosha Hospital in the sum of 
$20,888.85 for unpaid medical services, and Kenosha Hospital 
filed a judgment against Garcia on August 28, 2001, for the 
principal of the debt plus costs and disbursements as authorized 
by law. 
¶6 
On September 25, 2001, Kenosha Hospital commenced an 
earnings garnishment action against Garcia and the garnishee, 
Richter Industries, to collect the unsatisfied civil judgment.  
The notice of the garnishment action was served upon the 
garnishee's payroll department at 4910 70th Avenue, Kenosha, 
Wisconsin, 
by 
certified 
mail 
pursuant 
to 
Wis. 
Stat. 
§ 812.35(3)(a)(2) on October 2, 2001.  Erik Richter signed the 
return receipt.  On December 17, 2001, Kenosha Hospital moved 
the circuit court for a judgment against Richter Industries for 
the amount of Garcia's debt plus the cost of the garnishment 
based on Richter Industries' failure to respond to the notice of 
garnishment. 
¶7 
The earnings garnishment form set out the amount that 
Garcia 
owed 
to 
Kenosha 
Hospital 
and 
instructed 
Richter 
Industries how to effect the garnishment.  The earnings 
garnishment form did not advise Richter Industries that it might 
be held liable for the full amount of Garcia's debt to Kenosha 
Hospital.   
¶8 
On December 19, 2001, the notice of motion for 
judgment against Richter Industries was served by a process 
No. 
02-1727   
 
5 
 
server on Richter Industries at its Kenosha, Wisconsin plant by 
personal service on a woman who stated that she was a secretary 
and was the "person in charge."  The woman would not give her 
name.6 
¶9 
On January 2, 2002, a hearing was held on the motion 
for a judgment against Richter Industries.  Richter Industries 
did not appear at the hearing, and the minutes of the circuit 
court reflect that the circuit court held Richter Industries 
responsible for the amount owed by Garcia.  On January 7, 2002, 
at 1:45 p.m., Garcia filed for bankruptcy.  On the same 
afternoon at 4:00 p.m., the circuit court filed an order of 
judgment awarding Kenosha Hospital a judgment against Richter 
Industries for the amount of Kenosha Hospital's judgment against 
Garcia plus post-judgment costs "less the sum of $527.64 paid by 
the Garnishee."7   
¶10 On January 10, 2002, a notice of bankruptcy was filed 
on behalf of Garcia in the Kenosha County Circuit Court, 
explaining that Kenosha Hospital had been named as a creditor.  
                                                 
6 The motion for judgment states the following: 
The Plaintiff, by Ronald L. Diersen its Attorney, 
moves the court for a judgment against the Garnishee, 
Richter Industries, Inc., in the amount of the 
judgment against the Defendant, Jesus E. Garcia, plus 
the cost of the Garnishment and this motion.  This 
motion is based on the Garnishee's failure to respond 
to the garnishment received by the Garnishee on 
October 2, 2001.  
7 Although 
the 
court 
of 
appeals 
stated 
that Richter 
Industries held no earnings of Garcia, the record shows that the 
sum of $527.64 had been garnished by Richter Industries. 
No. 
02-1727   
 
6 
 
The notice stated that "[t]he Bankruptcy Code prohibits further 
prosecution of this matter without the specific approval of the 
United States Bankruptcy Court" for the Eastern District of 
Wisconsin.   
¶11 In a notice of motion filed on May 10, 2002, Richter 
Industries moved to vacate the judgment.  It argued that service 
of the notice of motion for judgment was improper, claiming that 
service was made at the plant located in Kenosha, Wisconsin, 
rather than at Lake Forest, Illinois, where the registered agent 
and office of the corporation were located.  It also argued that 
pursuant to 11 U.S.C. § 524(a)(1) the underlying judgment 
against Garcia was void, and that since the judgment entered in 
favor of Kenosha Hospital against Richter Industries was 
predicated on the void judgment against Garcia, the judgment 
against Richter Industries was also void.  Richter Industries in 
effect claims that as a result of the bankruptcy stay and 
improper service, the judgment against it should be vacated.   
¶12 The 
circuit 
court 
considered 
Richter 
Industries' 
motion in a hearing on June 12, 2002.  On June 20, 2002, it 
issued an order denying Richter Industries' motion to vacate the 
judgment, stating that the judgment granted in favor of Kenosha 
Hospital against Richter Industries on January 7, 2002, was to 
remain in effect.  The garnishee, Richter Industries, timely 
appealed to the court of appeals, which affirmed the judgment 
and order of the circuit court.  We granted review. 
II 
No. 
02-1727   
 
7 
 
¶13 The first and third issues raised on review are 
questions of law requiring the interpretation of statutes.  The 
interpretation of statutes is a question of law that this court 
decides independently of the circuit court and court of appeals, 
but benefiting from the analyses of both.8 
¶14 The second issue involves the circuit court's refusal 
to vacate the judgment against Richter Industries.  Richter 
Industries' motion to vacate does not cite a statute or rule 
under which it was proceeding.  We assume that the motion was 
made under Wis. Stat. § (Rule) 806.07(1) seeking relief from a 
judgment, and we examine the circuit court's order refusing to 
vacate a judgment for the erroneous exercise of discretion.9   
¶15 This court has often said that "a discretionary 
determination must be the product of a rational mental process 
by which the facts of record and law relied upon are stated and 
are considered together for the purposes of achieving a 
reasonable determination."10  An appellate court will affirm a 
circuit court's discretionary decision as long as the circuit 
court "examined the relevant facts, applied a proper standard of 
law, and, using a demonstrated rational process, reached a 
                                                 
8 See State v. Cole, 2003 WI 59, ¶12, 262 Wis. 2d 167, 663 
N.W.2d 700. 
9 See Ness v. Digital Dial Communications, Inc., 227 
Wis. 2d 592, 599-600, 596 N.W.2d 365 (1999).  
10 Hartung v. Hartung, 102 Wis. 2d 58, 66, 306 N.W.2d 16 
(1981). 
No. 
02-1727   
 
8 
 
conclusion that a reasonable judge could reach."11  Therefore, 
the record on appeal must "reflect the circuit court's reasoned 
application of the appropriate legal standard to the relevant 
facts in the case."12  "If a judge bases the exercise of his 
discretion upon an error of law, his conduct is beyond the 
limits of discretion."13  
III 
¶16 The first question presented is whether service of the 
notice of motion for judgment complied with the statutes.  
¶17 To answer this question, we must examine the interplay 
of the following statutes:  Wis. Stat. §§ 812.35, 812.41, 
812.31, 801.11(5), and 801.14(2).   
¶18 We start with Wis. Stat. § 812.35, which governs the 
commencement 
of 
an 
earnings 
garnishment 
action. 
Earnings 
garnishment procedures are different from other garnishment 
proceedings.  
¶19 Under Wis. Stat. § 812.35(1), in order "[t]o commence 
an earnings garnishment proceeding, the judgment creditor shall 
                                                 
11 Long v. Long, 196 Wis. 2d 691, 695, 539 N.W.2d 462 (Ct. 
App. 1995).  See also State ex rel. M.L.B. v. D.G.H., 122 
Wis. 2d 536, 541, 363 N.W.2d 419 (1985); Shuput v. Lauer, 109 
Wis. 2d 164, 177-78, 325 N.W.2d 321 (1982). 
12 State v. Delgado, 223 Wis. 2d 270, 281, 588 N.W.2d 1 
(1999). 
13 State v. Hutnik, 39 Wis. 2d 754, 763, 159 N.W.2d 733 
(1968).  See also In re Settlement for Personal Injuries of 
Konicki, 186 Wis. 2d 140, 150, 519 N.W.2d 723 (Ct. App. 1994) 
("[A] trial court erroneously exercises its discretion when its 
decision is based on a misapplication or erroneous view of the 
law."). 
No. 
02-1727   
 
9 
 
file with the clerk of courts a garnishment notice under s. 
812.44(2)."  After the clerk of courts receives the garnishment 
notice, the clerk of courts issues two earnings garnishment 
forms for each garnishee.14 
¶20 One 
of 
the 
two 
statutorily 
prescribed 
earnings 
garnishment forms must be served upon the debtor, while the 
other is served upon the garnishee.15  The earnings garnishment 
form advises the garnishee of the amount of the debt owed by the 
creditor but does not advise the garnishee of its potential 
liability for failing to adhere to the notice.   
¶21 The acceptable methods of service for the earnings 
garnishment form for the garnishee as set forth in Wis. Stat. 
§ 812.35(3)(b) are:16 first class mail; certified mail, return 
                                                 
14 Wisconsin Stat. § 812.35(2) provides: 
Upon receipt of the notice under sub. (1) and payment 
of the fee under s. 814.62(1), the clerk of courts 
shall issue 2 earnings garnishment forms under s. 
812.44(3) 
for 
each 
garnishee. 
 
Blank 
earnings 
garnishment forms may be issued, but they shall carry 
the court seal.  A circuit court may permit, by rule, 
the clerk to issue earnings garnishment forms after 
payment of the fee but before the filing of the notice 
under sub. (1).  That circuit court rule shall require 
the notice to be filed with the court at a later time, 
but no later than 5 business days after the date the 
garnishee is served under sub. (3). 
15  Although no garnishment form is in the record, at oral 
argument counsel for Kenosha Hospital explained that he mailed 
an earnings garnishment form provided by the clerk to Richter 
Industries.  
16 Wisconsin Stat. § 812.35(3) provides: 
(a) Within 60 days after filing the notice under sub. 
(1) and as specified under sub. (4)(c), the creditor 
No. 
02-1727   
 
10 
 
receipt requested; any means permissible for the service of a 
summons in a civil action, other than publication; and any other 
means if the garnishee admits service.  Service in the present 
case was by certified mail in accordance with the statute.  The 
legislature apparently sought to simplify the process of 
initiating earnings garnishment proceedings.  The validity of 
the service of the earnings garnishment form by certified mail 
is not in dispute.  
¶22 While Wis. Stat. § 812.35 governs service of the 
earnings garnishment form, § 812.41 governs a creditor's action 
against a garnishee who fails to pay over funds.17  That statute 
                                                                                                                                                             
shall serve one of the 2 earnings garnishment forms 
upon the debtor by one of the following means: 
1.  First class mail. 
2.  Certified mail, return receipt requested. 
3.  Any means permissible for the service of a summons 
in a civil action, other than publication. 
(b) Within 60 days after filing the notice under sub. 
(1), the creditor shall serve one of the 2 earnings 
garnishment forms upon the garnishee by one of the 
means listed under par. (a)1 to 3, or by other means 
if the garnishee signs an admission of service. 
17 Wisconsin Stat. § 812.41(1) provides in relevant part: 
If the garnishee fails to pay over funds to which the 
creditor is entitled under this subchapter within the 
time required under s. 812.39, the creditor may, upon 
notice to all of the parties, move the court for 
judgment against the garnishee in the amount of the 
unsatisfied judgment plus interest and costs. 
No. 
02-1727   
 
11 
 
provides that a "creditor may, upon notice to all of the 
parties, move the court for judgment against the garnishee in 
the amount of the unsatisfied judgment plus interest and costs."  
Section 812.41 thus admonishes the garnishee that if it fails to 
pay over funds to which the creditor is entitled, a judgment may 
be entered against the garnishee for the amount the debtor owes 
the creditor. 
¶23 The purpose of Wis. Stat. § 812.41 in making the 
garnishee liable for the entire obligation of the debtor is 
apparently to induce satisfaction of garnishment by threatening 
the garnishee with a penalty for the entire amount of the debt 
owed the creditor, irrespective of what the garnishee itself 
                                                                                                                                                             
The parties assume that Wis. Stat. § 812.41 applies in the 
present case and seem to treat the statute as governing 
garnishees who default by not responding to the court filings.  
Section 812.41, however, governs a notice of motion when a 
garnishee fails to pay over funds to which the creditor is 
entitled.  In the present case apparently Richter Industries 
withheld some of Garcia's earnings and paid them to Kenosha 
Hospital, all prior to Garcia's filing for bankruptcy.  The 
judgment against Richter Industries credited it with $527.64 as 
a sum paid by the garnishee.  Yet Richter Industries does not 
dispute the applicability of § 812.41 to the present case.  
We cannot determine whether Richter Industries withheld and 
paid over precisely what it was supposed to pay, too much, or 
too little.  The record is devoid of this information.  We 
cannot reasonably engage, at this stage of the proceedings in 
this court, in conjecture about what effect this withholding has 
on the present case.  The applicability of Wis. Stat. § 812.41 
may be an issue on remand. 
Nor do the parties discuss the applicability, if any, of 
Wis. Stat. § 806.02, which governs default judgments when a 
defendant fails to appear.  
No. 
02-1727   
 
12 
 
might owe the creditor.18  After all, the garnishee, not the 
creditor, knows how much the garnishee owes the debtor in 
earnings. 
¶24 Section 812.41 does not, however, explicitly provide 
how a notice of motion for judgment must be served on a 
garnishee.19  We therefore turn to Wis. Stat. § 812.31, which in 
turn directs us to the general rules of practice and procedure 
in Wis. Stat. chapters 801 to 847, to determine how a notice of 
                                                 
18 Robert Laurence, The Supreme Court and the Defaulting 
Garnishee, Redux: An Essay on McCourt Manufacturing Company v. 
The Credit Bureau of Fort Smith and a Few of its Predecessors, 
49 Ark. L. Rev. 1, 2 (1996); Young v. Young, 547 F. Supp. 1, 4 
(W.D. Tenn. 1980) (describing the purpose of a similar Tennessee 
statute). 
Statutes exist in other jurisdictions imposing liability on 
the garnishee 
for 
a debtor's debt 
that 
are 
similar to 
Wis. Stat. § 812.14.  See, e.g., Wash. Rev. Code Ann. § 6.27.200 
(West 
2003) 
(on 
garnishee's 
failure 
to 
answer 
writ 
of 
garnishment within requisite time provided, with proper notice, 
court may enter default judgment against garnishee for full 
amount claimed by plaintiff creditor against defendant debtor); 
Tenn. Code Ann. §§ 29-7-114, 29-7-115 (2003) (if a garnishee 
fails to appear and answer the garnishment, the garnishee shall 
be presumed indebted to the creditor for the full amount of the 
debt and conditional judgment is entered which may then become a 
final judgment); Ark. Code. Ann. §§ 16-110-401, 16-110-407 
(Michie 2003) (a garnishee with notice that fails to answer 
garnishment action may be held liable for full amount of 
judgment against debtor); Kan. Stat. Ann. § 60-718(c) (2001) 
(repealed 2002) (if garnishee fails to answer, the garnishee may 
be granted judgment for the amount of debt owed to the 
creditor).   
19 In an earnings garnishment, no summons is served on the 
garnishee under the statute and none is in the record before us.  
The judgment against Richter Industries states that "a verified 
Complaint is on file."  No such complaint is in the record 
before the court. 
No. 
02-1727   
 
13 
 
motion for judgment must be served on a garnishee in an earnings 
garnishment action.20 
¶25 Two means of service in chapter 801 may be applicable 
to the present case.  The parties dispute which of these means 
of service should govern service of a notice of motion for 
judgment on a garnishee.  Richter Industries argues that 
Wis. Stat. § 801.11(5), governing service of a summons for 
personal jurisdiction,21 and § 180.0504, governing service on 
corporations,22 set forth the appropriate means of service for a 
notice of motion for judgment in an earnings garnishment action.  
                                                 
20 Wisconsin Stat. § 812.31 states: "Except as otherwise 
provided in this subchapter, the general rules of practice and 
procedure in chs. 750 to 758 and 801 to 847 shall apply to 
actions under this subchapter." 
21 Wisconsin Stat. § 801.11(5) provides for service of a 
summons on a domestic or foreign corporation as follows: 
(5) 
Domestic 
or foreign 
corporations 
or 
limited 
liability companies, generally. Upon a domestic or 
foreign corporation or domestic or foreign limited 
liability company: 
(a) By personally serving the summons upon an officer, 
director or managing agent of the corporation or 
limited liability company either within or without 
this state. In lieu of delivering the copy of the 
summons to the officer specified, the copy may be left 
in the office of such officer, director or managing 
agent with the person who is apparently in charge of 
the office. 
22 Wisconsin Stat. § 180.0504(1) provides inter alia that "a 
corporation's registered agent is the corporation's agent for 
service of process . . . ." Section 180.0504(4) provides that 
"this section does not limit or affect the right to serve 
any . . . notice . . . to be served on a corporation in any 
other manner permitted by law."  
No. 
02-1727   
 
14 
 
In 
contrast, 
Kenosha 
Hospital 
argues 
that 
Wis. 
Stat. 
§ 801.14(2), governing the service and filing of pleadings and 
other papers, is the relevant statute governing service of a 
motion for judgment in an earnings garnishment action. 
¶26 Richter Industries argues that a notice of motion for 
judgment is a mandate requiring the appearance of a defendant in 
an action under penalty of having a judgment entered against it 
for failing to do so.  In other words, Richter Industries 
contends that the notice of motion for judgment should be 
treated as the equivalent of a summons and argues that the 
statutes require personal service of that notice.  In sum, 
according to Richter Industries, the notice of motion for 
judgment must comply with the statutes governing service of 
summons and personal jurisdiction, and Wisconsin requires strict 
compliance with rules of statutory service.23     
                                                 
23 See Dietrich v. Elliot, 190 Wis. 2d 816, 827, 528 
N.W.2d 17 (1995).  In support of its position that service of 
the notice of motion for judgment was required in the present 
case under Wis. Stat. § 801.11(5), Richter Industries relies on 
Bar Code Resources v. Ameritech Information Systems, Inc., 229 
Wis. 2d 287, 599 N.W.2d 872 (Ct. App. 1999).  In Bar Code, the 
court of appeals concluded that the service did not comply with 
statutory service requirements and that the circuit court never 
obtained personal jurisdiction over the defendant when the 
plaintiff attempted to initiate an action by delivering a 
summons to a security guard who worked for a wholly-owned 
subsidiary corporation of the defendant corporation that was 
housed in the same building as the defendant.  
    
No. 
02-1727   
 
15 
 
¶27 Richter Industries argues that to serve the notice of 
motion like a summons, Kenosha Hospital (1) had to personally 
serve an officer, director, or managing agent of the corporation 
either within or without the state;24 (2) had to leave the notice 
of motion in the office of an officer, director, or managing 
agent with the person who is apparently in charge of the 
office;25 or (3) had to serve its registered agent in Illinois.26  
Richter Industries argues that Kenosha Hospital did not comply 
with any of these three statutory methods of personal service of 
a summons and that service was therefore invalid.  We agree with 
Richter Industries that on the basis of this record, it appears 
that Kenosha Hospital did not comply with any of these three 
methods of personal service.    
                                                                                                                                                             
We disagree with Richter Industries that the Bar Code case 
controls our decision in the present case.  Bar Code is not 
directly applicable to this case.  The plaintiff in Bar Code 
sought to serve a summons and complaint rather than, as in this 
case, a notice of motion for judgment in an earnings garnishment 
proceedings.  Wisconsin Stat. § 801.11(5) expressly governs 
service of a summons, and that section was not followed in the 
Bar Code case.  Section 801.11(5) does not expressly govern 
service of a notice of motion for judgment in an earnings 
garnishment action.  
24 Wis. Stat. § 801.11(5). 
25 Wis. Stat. § 801.11(5)(a). 
 
Wisconsin 
Stat. 
§ 801.11(5)(c) provides for service "in a manner specified by 
any other statute upon the defendant or upon an agent authorized 
by appointment or by law to accept service of the summons for 
the defendant." 
26 Wis. Stat. § 180.1510(1).  
No. 
02-1727   
 
16 
 
¶28 The record does not show that the secretary served at 
the Kenosha plant was an officer, director, or managing agent of 
the corporation or was in charge of the office of an officer, 
director, or managing agent of the corporation.  Nothing in the 
record allows us to draw an inference, as Kenosha Hospital 
apparently would like us to do, that because Erik Richter signed 
the receipt for the initial garnishment form at the Kenosha 
plant, it was, in fact, his office.   
¶29 Nor was personal service made on the registered agent 
of Richter Industries.  Wisconsin Stat. § 180.1510(1) provides 
that a registered agent of a foreign corporation authorized to 
do business in Wisconsin is the corporation's agent for service 
of process, notice, or demand to be served on the corporation.  
According to Richter Industries, service on its registered agent 
was the only way to achieve personal jurisdiction over it.  
Richter Industries asserted in the circuit court that its 
registered agent was in Illinois.  It submitted to the circuit 
court a paper filed in Illinois showing that its registered 
agent was in Illinois and that its officers and directors 
resided in Illinois or Florida.   
¶30 This Illinois document does not appear to govern 
service on the corporation in Wisconsin.  According to the 
records of the Wisconsin Department of Financial Services that 
this court obtained and examined,27 Richter Industries obtained 
on March 2, 1993, a certificate of authority to transact 
                                                 
27 See Wis. Stat. § 990.01(2)(b) (judicial notice). 
No. 
02-1727   
 
17 
 
business in Wisconsin, and the certificate was revoked by the 
department on November 3, 1994.  Neither party presented this 
information to this court. 
¶31 A foreign corporation that has no registered agent or 
whose 
certificate 
has 
been 
revoked 
may, 
under 
certain 
circumstances, be served by registered or certified mail 
addressed to the foreign corporation at its principal office as 
shown on the records of the Department of Financial Institutions 
under Wis. Stat. § 180.1510(4).  According to the last records 
of the department, Richter Industries' principal office was in 
Illinois, while the last address for the registered agent was 
the Kenosha plant, the address at which Kenosha Hospital made 
personal service.  Apparently, § 180.1510(4) was not satisfied;  
Kenosha Hospital did not serve Richter Industries at its 
principal office, which is located in Illinois.28 
¶32 Wisconsin Stat. § 180.1531(4) and (5) also deal with 
service on foreign corporations whose certificate of authority 
has been revoked.  These provisions were not cited to the court.  
The registered agent may be served but the cause of action must 
have arisen while the foreign corporation was authorized to 
transact business in Wisconsin.  These provisions do not appear 
to assist Kenosha Hospital in arguing that it served Richter 
                                                 
28 Under 
Wis. 
Stat. 
§ 180.1510(3), 
which 
applies 
to 
corporations 
formerly 
authorized 
to 
transact 
business 
in 
Wisconsin, the cause of action must have arisen while the 
corporation was authorized to transact business in the state for 
service to be made.  Here the cause of action arose after 
Richter Industries' certification was revoked. 
No. 
02-1727   
 
18 
 
Industries properly.  In the present case, the cause of action 
against Richter Industries arose long after its authority to 
transact business in the state terminated. 
¶33 Service upon a foreign corporation may also be made in 
any other manner now or hereafter permitted by law.29  Neither 
party argues that any statute, other than those mentioned above, 
governs the manner of service.  
¶34 In contrast, Kenosha Hospital argues that § 801.14(2), 
not § 801.11(5), governs service of the notice of motion for 
judgment because the notice of motion is not like a summons but 
rather is a document in an already existing proceeding to which 
Richter Industries was a party.  Section 801.14(2) provides, in 
relevant part, that service of a pleading, written motion, 
written notice, or demand upon a party shall be made by 
delivering a copy or by mailing a copy to the last-known address 
of the party.  Delivering a copy means handing it to a party or 
leaving the copy at a party's office with a clerk or other 
person in charge thereof.30   
                                                 
29 Wis. Stat. § 180.1510(5). 
30 Wisconsin Stat. § 801.14(2) provides: 
Whenever under these statutes, service of pleadings 
and other papers is required or permitted to be made 
upon a party represented by an attorney, the service 
shall be made upon the attorney unless service upon 
the party in person is ordered by the court.  Service 
upon the attorney or upon a party shall be made by 
delivering a copy or by mailing it to the last-known 
address, or, if no address is known, by leaving it 
with the clerk of the court.  Delivery of a copy 
within this section means: handing it to the attorney 
or to the party; transmitting a copy of the paper by 
No. 
02-1727   
 
19 
 
¶35 Kenosha Hospital asserts that its personal service of 
the notice of motion for judgment on a person in charge of 
Richter Industries' office at the address to which the original 
garnishment notice was mailed and for which receipt was 
acknowledged complied with Wis. Stat. § 801.14(2).  We agree 
with Kenosha Hospital that service of the notice of motion 
complied with Wis. Stat. § 801.14(2).   
¶36 The 
question 
that 
remains, 
however, 
is 
whether 
Wis. Stat. § 801.11(5), governing personal service of a summons, 
or § 801.14(2), governing service of pleadings and papers after 
commencement of action, applies to a Wis. Stat. § 812.41 motion 
for judgment against a garnishee for the amount of the debtor's 
debt.   
¶37 The court of appeals concluded that service was proper 
because the earnings garnishment action had been commenced, that 
§ 801.14(2) applies to service of papers in actions that have 
been commenced, and that personal service on a person who 
                                                                                                                                                             
facsimile machine to his or her office; or leaving it 
at his or her office with a clerk or other person in 
charge thereof; or, if there is no one in charge, 
leaving it in a conspicuous place therein; or, if the 
office is closed or the person to be served has no 
office, leaving it at his or her dwelling house or 
usual place of abode with some person of suitable age 
and discretion then residing therein.  Service by mail 
is complete upon mailing.  Service by facsimile is 
complete upon transmission.  The first sentence of 
this subsection shall not apply to service of a 
summons or of any process of court or of any paper to 
bring a party into contempt of court.  
No. 
02-1727   
 
20 
 
purported to be a "person in charge" satisfies the requirements 
of § 801.14(2).31   
¶38 We agree with Richter Industries that Wis. Stat. 
§ 801.11(5), governing personal service, is the appropriate 
statute to apply in this case, not § 801.14(2).  We reason as 
follows:  The judgment sought against Richter Industries, 
although arising out of an earnings garnishment proceeding that 
was properly commenced, is to some extent separate and distinct 
from the earnings garnishment action.  The earnings garnishment 
action is designed to recover the debtor's earnings held by the 
garnishee.  The legislature's goal in the earnings garnishment 
proceedings was to expedite the proceedings by providing a 
simplified and inexpensive means of serving a garnishee.32  In 
contrast, the purpose of a motion for judgment against the 
garnishee for the entire debtor's debt is to recover a judgment 
against 
the 
garnishee 
for 
the 
garnishee's 
violating 
the 
                                                 
31 The final sentence in § 801.14(1), governing service of 
papers in an action, provides that "[n]o service need be made on 
parties in default for failure to appear except that pleadings 
asserting new or additional claims for relief against them shall 
be served upon them in the manner provided for service of 
summons in s. 801.11." 
32 In adopting the new earnings garnishment procedure in 
1993, the legislature attempted to simplify and hasten the 
earnings 
garnishment 
process. 
The 
number 
of 
garnishment 
proceedings initiated each year is voluminous for garnishees and 
the court system.  In 1992, there were an estimated 84,600 
garnishment actions filed in the circuit courts.  Fiscal 
Estimate by Sheryl Gervasi, Director of State Courts Office 
(Aug. 16, 1993) (Drafting File Records, 1993 S.B. 336, on file 
at Legis. Reference Bureau, Madison, Wis.).   
No. 
02-1727   
 
21 
 
garnishment statutes and failing to assist the creditor in 
procuring the debtor's earnings to satisfy the debtor's debt.  
Requiring personal service of the notice of motion for judgment 
does not contravene the legislative goal of a simplified, 
expeditious procedure for earnings garnishment.  Because a 
garnishee becomes responsible for the full amount of the 
debtor's debt for failing to withhold the garnished funds 
without a legitimate excuse, it is important that heightened 
statutory protections be applied to give the garnishee full 
notice of the financial risk it is taking by failing to appear 
or respond to the notice of judgment.       
¶39 For these reasons, we conclude on reading Wis. Stat. 
§§ 812.35, 812.41, 812.31, 801.11(5), and 801.14(2) together 
that 
the 
notice of motion 
for judgment 
in 
an earnings 
garnishment procedure should have been served like a summons in 
the present case, as Richter Industries contends, rather than as 
a paper in a pending action as Kenosha Hospital contends.  
¶40 As we explained previously, on the basis of the record 
before this court it does not appear, as best we can determine, 
that service of the notice of motion for judgment on a person in 
charge of one of Richter Industries' offices was sufficient 
service under § 801.11(5). 
¶41 Richter Industries objects to the service of the 
notice of motion for judgment in this earnings garnishment case 
as having been made under the wrong statute.  It does not argue 
that the failure of personal service of the notice of motion for 
judgment on it (which was commenced by certified mail service) 
No. 
02-1727   
 
22 
 
or the failure to give it notice of the amount of the potential 
liability in the notice of motion for judgment offends due 
process, that is, that "'traditional notions of fair play and 
substantial justice'" have been offended.33  We therefore do not 
address any due process issues.   
IV 
¶42 The second issue presented is whether the circuit 
court erred in refusing to vacate the judgment against Richter 
Industries.  The motion to vacate filed in the circuit court and 
Richter Industries' brief in this court do not refer to any rule 
or statute as authority for the motion to vacate.  As best we 
can determine, Richter Industries and the circuit court probably 
proceeded under Wis. Stat. § 806.07(1), which provides that a 
circuit court may relieve a party from a judgment upon such 
terms as are just.  A circuit court exercises its discretion 
under § 806.07(1). 
¶43 The circuit court declared that service was proper but 
did not state why.  The parties in the circuit court and here 
did not carefully examine the various statutes involved and 
apply them to these facts.  We have concluded that service of 
the notice of motion should have complied with Wis. Stat. 
§ 801.11(5), and that according to this record, service did not 
comply with § 801.11(5).  Thus the circuit court exercised its 
discretion upon an error of law and erroneously exercised its 
                                                 
33 Milliken v. Meyer, 311 U.S. 457, 463 (1940). 
No. 
02-1727   
 
23 
 
discretion in refusing to vacate the judgment.34  We therefore 
remand the cause to the circuit court to consider again the 
motion to vacate the judgment.          
¶44 Because the matter is returning to the circuit court, 
we consider the third issue raised by Richter Industries, namely 
whether a violation of the automatic bankruptcy stay occurred 
when Kenosha Hospital moved for judgment against Richter 
Industries.  The parties spent most of their time in the circuit 
court and in this court debating this issue. 
V 
¶45 The third issue raised is whether Kenosha Hospital 
violated the automatic stay in bankruptcy provided by 11 U.S.C. 
§ 362(a) when it moved the circuit court for judgment against 
the garnishee, Richter Industries.  Richter Industries argues 
that because the bankruptcy stay provisions were violated, the 
circuit court had no jurisdiction to enter a judgment against 
it.  To decide this issue, we look to the text of 11 U.S.C. 
§ 362(a) and the case law interpreting this provision. 
¶46 The bankruptcy statute, 11 U.S.C. § 362(a),35 provides 
that a bankruptcy petition operates as a stay of proceedings and 
                                                 
34 State v. Hutnik 39 Wis. 2d 754, 763, 159 N.W.2d 733 
(1968).  See also In re Settlement for Personal Injuries of 
Konicki 186 Wis. 2d 140, 150, 519 N.W.2d 723 (Ct. App. 1994) 
("[A] trial court erroneously exercises its discretion when its 
decision is based on a misapplication or erroneous view of the 
law."). 
35 11 U.S.C. § 362(a) provides: 
(a) Except as provided in subsection (b) of this 
section, a petition filed under section 301, 302, or 
No. 
02-1727   
 
24 
 
enforcement actions against a debtor or the property of the 
bankruptcy estate.  The stay under this statute includes a stay 
                                                                                                                                                             
303 of this title, or an application filed under 
section 5(a)(3) of the Securities Investor Protection 
Act of 1970, operates as a stay, applicable to all 
entities, of—— 
(1) the commencement or continuation, including the 
issuance or employment of process, of a judicial, 
administrative, or other action or proceeding against 
the debtor that was or could have been commenced 
before the commencement of the case under this title, 
or to recover a claim against the debtor that arose 
before the commencement of the case under this title; 
(2) the enforcement, against the debtor or against 
property of the estate , of a judgment obtained before 
the commencement of the case under this title; 
(3) any act to obtain possession of property of the 
estate or of property from the estate or to exercise 
control over property of the estate; 
(4) any act to create, perfect, or enforce any lien 
against property of the property of the estate ; 
(5) any act to create, perfect, or enforce against 
property of the debtor any lien to the extent that 
such lien secures a claim that arose before the 
commencement of the case under this title; 
(6) any act to collect, assess, or recover a claim 
against the debtor that arose before the commencement 
of the case under this title; 
(7) the setoff of any debt owing to the debtor that 
arose before the commencement of the case under this 
title against any claim against the debtor; and 
(8) the commencement or continuation of a proceeding 
before the United States Tax Court concerning the 
debtor. 
No. 
02-1727   
 
25 
 
of a garnishment proceeding against a debtor.36  In this case, 
however, the garnishment proceedings against the debtor, Garcia, 
and his property are not at issue.  Rather, Kenosha Hospital, 
the creditor, is pursuing an action against Richter Industries, 
the garnishee.   
¶47 Accordingly, we must determine whether a creditor's 
pursuit of a judgment against a garnishee, seeking to hold the 
garnishee personally liable for all or part of the debtor's 
debt, indirectly violates the bankruptcy stay.  In order to 
answer this question, we first consider the principal purposes 
of the bankruptcy law and then gauge the positions of the 
opposing parties in light of these purposes. 
¶48 One of the underlying principal purposes of bankruptcy 
law is to discharge a debtor's debts and give the debtor a fresh 
start, free from the weight and pressure of pre-existing debt.37  
Another purpose of bankruptcy law is to promote the equal 
treatment of creditors of equal standing.  The automatic stay 
provides creditors protection by preventing the creditors from 
engaging in a "disorderly, piecemeal dismemberment of the 
debtor's estate outside the bankruptcy proceedings."38   
                                                 
36 See In re Mims, 209 B.R. 746, 748 (Bankr. M.D. Fla. 
1997). 
37 Local Loan Co. v. Hunt, 292 U.S. 234 (1934). 
38 Mann v. Chase Manhattan Mortgage Corp., 316 F.3d 1, 3 
(1st Cir. 2003) (citing Soares v. Brockton Credit Union, 107 
F.3d 969, 975-76 (1st Cir. 1997)).  See also In re Smurzynski, 
72 B.R. 368, 371 (Bankr. N.D. Ill. 1987). 
No. 
02-1727   
 
26 
 
¶49 According 
to Richter 
Industries, 
if 
the default 
judgment 
obtained 
by 
Kenosha 
Hospital 
imposing 
personal 
liability on it is upheld, Garcia has not obtained complete 
relief and is not afforded a "fresh start."  Richter Industries 
reasons as follows:  Allowing a creditor to obtain a judgment 
against a garnishee-employer is merely a means of indirectly 
proceeding to collect, assess, and recover a claim against the 
debtor.  Richter Industries argues that when the debt is clearly 
not that of the garnishee, but rather that of the debtor, the 
judgment will in effect be against the debtor and not the 
garnishee.  Richter Industries further argues that judgments 
obtained against garnishee-employers may impair the employment 
relationship 
between 
debtors 
and 
their 
employers. 
 
The 
employment relationship is essentially a financial interest that 
is protected when a debtor files for bankruptcy.  More 
specifically, Richter Industries argues that an employer who has 
suffered a judgment might be tempted to deduct the amount of the 
judgment from the debtor's wages to recoup its loss or to 
terminate the debtor's employment for the trouble and expense he 
has imposed on it.39   
                                                 
39 Richter Industries also relies on Chase Lumber & Fuel Co. 
v. Koch, 197 B.R. 654 (Bankr. W.D. Wis. 1996).  In Chase Lumber, 
the garnishee withheld wages of the debtor.  The bankruptcy 
court concluded that postpetition retention of the garnished 
funds was a violation of the automatic bankruptcy stay.   
The court of appeals distinguished Chase Lumber on the 
ground that in the present case none of Garcia's wages were 
withheld by Richter Industries. Kenosha Hosp., 265 Wis. 2d 900, 
¶¶17, 20.  The court of appeals was incorrect.  Some of Garcia's 
wages were garnished.   
No. 
02-1727   
 
27 
 
¶50 In support of its position, Richter Industries cites 
University of Alabama Hospitals v. Warren, 7 B.R. 201 (Bankr. 
N.D. Ala. 1980).40  In Warren, after a judgment was entered 
against a debtor for unpaid debts, writs of garnishment were 
served on the debtor's employer.  The employer did not answer 
the writs, and a conditional judgment was initially entered 
against the employer-garnishee, followed by a final judgment.  
The debtor then filed for bankruptcy. 
¶51 The Warren bankruptcy court expressed concern about 
the potential effect that the judgment against the garnishee-
employer would have on the debtor's relationship with his 
employer.  The Warren bankruptcy court viewed the debtor's right 
to earn a living as property that is protected from creditors 
affected by his bankruptcy. 
¶52 The Warren bankruptcy court held that although the 
garnishee-employer was culpable for failing to answer the 
                                                                                                                                                             
Even accepting Richter Industries' argument that the court 
of appeals erred on the facts and that Chase Lumber cannot be 
distinguished on the ground set forth by the court of appeals, 
we nevertheless conclude that Chase Lumber does not assist 
Richter Industries.   
According to Chase Lumber, a debtor may claim that his 
wages that were wrongfully garnished are exempt, that the funds 
are the property of the estate, and that the automatic 
bankruptcy stay protected them.  Chase Lumber is not applicable 
because Garcia is no longer a party to this action and has not 
claimed that his wages were wrongfully garnished.    
40 For additional cases taking a position similar to Warren, 
see, e.g., In re Feldman, 303 B.R. 137 (Bankr. E.D. Mich. 2003); 
O'Connor v. Methodist Hosp. of Jonesboro, Inc., 42 B.R. 390, 392 
(Bankr. E.D. Ark. 1984). 
No. 
02-1727   
 
28 
 
garnishment proceeding, it would not allow the judgment against 
the garnishee-employer to stand.  The judgment, according to the 
bankruptcy court, would undermine the concept of a "fresh 
start," could impair the relationship between the debtor-
employee and the garnishee-employer, and would ultimately lead 
to punishing the debtor who is seeking a "fresh start," free 
from his pre-existing debts.41  
                                                 
41 Richter Industries also relies on O'Connor v. Methodist 
Hosp. of Jonesboro, Inc., 42 B.R. 390 (Bankr. E.D. Ark. 1984), 
in 
arguing 
that 
Kenosha 
Hospital's 
proceeding 
with 
the 
garnishment is clearly a willful and deliberate violation of an 
automatic stay. 
 
The facts of O'Connor are substantially different from 
those in the present case.  In O'Connor, the writ of garnishment 
against the wages of the debtor was filed seven days after the 
debtor filed for bankruptcy.  After the filing of the stay and 
after receiving actual and official notice of the bankruptcy 
petition, the creditor proceeded with a default judgment against 
the garnishee.    
 
In the case at bar, the notice of garnishment was filed 
well in advance of the debtor's bankruptcy filing and the oral 
entry of default judgment against the garnishee was made five 
days prior to the bankruptcy filing.  
 
In O'Connor, the bankruptcy court concluded that "[i]t 
makes no difference whether the garnishment was filed prior or 
subsequent to the filing of the Chapter 13 petition.  At 
whatever stage the garnishment is, the creditor's attorney must 
do everything he can to halt the proceeding.  O'Connor, 42 B.R. 
at 392, citing In re Elder, 12 B.R. 491 (Bankr. M.D. Ga. 1981).   
 
In O'Connor, the creditor proceeded against the debtor and 
property of the estate.  In contrast, Kenosha Hospital proceeded 
against Richter Industries, the garnishee, for Richter's own 
debt that it incurred by failing to comply with the garnishment 
statutes.   
 
No. 
02-1727   
 
29 
 
¶53 In contrast, Kenosha Hospital argues that because the 
judgment against Richter Industries is based on Richter's 
failure to comply with the wage deduction statutes and does not 
involve the debtor or property of the estate, the bankruptcy 
petition and stay do not affect its judgment.  Kenosha Hospital 
contends that a majority of courts that have considered the 
issue have held that a judgment obtained against a garnishee as 
a 
penalty 
for 
failing 
to 
comply 
with 
a 
pre-bankruptcy 
garnishment does not violate a bankruptcy stay because neither 
the debtor nor property of the estate is involved.  Kenosha 
Hospital contends that only a minority of courts that have 
considered the issue take the position that Richter Industries 
urges, namely that a judgment against a garnishee as a penalty 
for failing to comply with a pre-bankruptcy garnishment is an 
indirect proceeding or act to collect, assess, and recover a 
claim against a debtor.   
¶54 Kenosha Hospital relies on Kanipe v. First Tennessee 
Bank, 293 B.R. 750 (Bankr. E.D. Tenn. 2002), and other cases 
                                                                                                                                                             
O'Connor was similarly distinguished by the bankruptcy 
court for the Northern District of Illinois in In re Gray, 97 
B.R. 930, 937 (Bankr. N.D. Ill. 1989). 
No. 
02-1727   
 
30 
 
similar to Kanipe, as support for its position.42  In Kanipe, 
before the debtor filed bankruptcy, the creditor obtained a 
judgment and garnished the debtor's employer.  The employer 
failed to answer the garnishment, and after the debtor was 
                                                 
42 See, e.g., In re Sowers, 164 B.R. 256, 259 (Bankr. E.D. 
Va. 1994) ("Attempting to collect money which was supposed to be 
garnished from an employee is not an action against the employee 
but is instead an action against the employer-garnishee."); In 
re Waltjen, 150 B.R. 419, 426 (Bankr. N.D. Ill. 1993) ("[A]n 
action against an employer for its failure to comply with the 
garnishment procedures will not be an action against the debtor 
or his the estate when the creditor is solely going after the 
assets of the non-debtor employer."); In re Gray, 97 B.R. at 
935-37 (default judgment entered against employer who failed to 
respond 
to 
garnishment 
proceedings 
does 
not 
violate 
the 
bankruptcy automatic stay because neither the debtor nor 
property of the estate was involved; judgment against employer 
is a "new and independent cause of action, not an order to turn 
over assets of the judgment debtor."); Bour v. Johnson, 864 P.2d 
380, 382 (Wash. 1993) ("[T]he automatic stay does not preclude 
enforcement of a default judgment against a garnishee/employer 
because the judgment does not affect property of the debtor."); 
Aluminum Co. of Am. v. Higgins, 635 S.W. 2d 290, 298-99 (Ark. 
Ct. App. 1982) (garnishee's failure to file an answer produced 
its liability for funds originally owed by the debtor and 
judgment did not affect debtor because it was not directed 
against him or his estate); Morris Plan Bank of Ga. v. Simmons, 
39 S.E.2d 166, 173-74 (Ga. 1946) (default judgment taken against 
garnishee for failing to answer garnishment did not offend 
bankruptcy stay because it was not an action against the 
debtor); United Guar. Residential Ins. Co. v. Dimmick, 916 P.2d 
638, 640 (Colo. Ct. App. 1996) ("The release from dischargeable 
debts enjoins creditors from collecting discharged debts as 
personal liabilities of the debtor. It does not, however, 
prevent the judgment creditor from seeking to collect from the 
garnishee earnings of the debtor which the garnishee had a duty 
to withhold and pay to the judgment creditor.") (citations 
omitted). 
See 11 U.S.C. § 524(e) ("[D]ischarge of a debt of the 
debtor does not affect the liability of any other entity on, or 
the property of any other entity for, such debt.").  
No. 
02-1727   
 
31 
 
discharged 
from 
bankruptcy 
the 
creditor 
was 
granted 
a 
conditional judgment against the employer for the full amount of 
the debtor's debt to the creditor.  The conditional judgment 
stated that it would become final if the employer failed to show 
good cause otherwise.  The conditional judgment was not made 
final, and the debtor urged the bankruptcy court to order the 
creditor to cease prosecution of the conditional judgment.  
¶55 The Kanipe bankruptcy court examined cases across the 
nation dealing with the issue of whether a judgment creditor's 
post-petition acts against a debtor's employer for failure to 
honor a pre-petition garnishment violated either an automatic 
stay or a discharge injunction.  According to the Kanipe 
bankruptcy court, courts in various jurisdictions have divided 
on the issue, with the majority of courts concluding that no 
violation has occurred because the actions are against the 
employer solely based on its failure to comply with wage 
deduction statutes in the respective states and do not involve 
the debtor or property of the estate.   
¶56 The 
Kanipe 
bankruptcy 
court 
concluded 
that 
the 
majority position is the correct one.  It reasoned that the 
prosecution 
of 
the 
conditional 
judgment 
was 
against 
the 
employer, not the debtor; that neither the debtor nor property 
of the estate was implicated; and that the outcome did not 
directly or indirectly affect the debtor or the property of the 
estate. 
¶57 The Kanipe bankruptcy court conceded that it, too, was 
concerned 
that 
its 
ruling 
could 
subject 
the 
debtor 
to 
No. 
02-1727   
 
32 
 
retaliation from her employer, although no allegations of 
threats had been raised in those proceedings.  The Kanipe court 
admonished employers that any employer that sustained corporate 
liability under the garnishment statutes "should tread lightly 
before seeking indemnification from the debtor as the employer 
itself could be in violation of the discharge injunction"43 and 
in violation of consumer protection laws prohibiting the 
discharge of an employee because her earnings have been 
garnished. 
¶58 We agree with Kenosha Hospital that the reasoning in 
Kanipe is sound.  We therefore conclude that Kenosha Hospital 
did not violate the automatic stay provisions of 11 U.S.C. 
§ 362(a) when it obtained a judgment against Richter Industries.  
Richter Industries does not claim that any earnings of Garcia 
protected by the bankruptcy stay are at stake here.  
¶59 The judgment at issue in the present case is not 
against the debtor, Garcia, but against the garnishee, Richter 
Industries, for failing to comply with the garnishment statutes.  
The 
judgment 
taken 
by 
Kenosha 
Hospital 
against 
Richter 
Industries does not involve Garcia, the debtor, or property of 
the estate.  Accordingly, the automatic stay does not prohibit 
Kenosha Hospital's actions.  
¶60 Were we to hold otherwise, Wis. Stat. § 812.41 would 
have no teeth.  We simply disagree with the view of the cases 
relied on by Richter Industries that a judgment against an 
                                                 
43 In re Kanipe, 293 B.R. 750, 759 (Bankr. E.D. Tenn. 2002) 
No. 
02-1727   
 
33 
 
employer-garnishee for failing to comply with the garnishment 
statutes will indirectly prevent a debtor from getting a "fresh 
start."  We conclude, as did the Kanipe bankruptcy court, that 
if an employer held personally liable for failing to comply with 
the garnishment statutes attempted to collect from the debtor on 
that debt, or retaliate in some other way, it might be liable 
for violating a bankruptcy stay or discharge as well as the 
Consumer Credit Protection Act.  
¶61 For the reasons set forth, we conclude that Kenosha 
Hospital did not violate the automatic stay provisions of 11 
U.S.C. § 362(a) when it obtained a default judgment against 
Richter Industries. 
¶62 For the reasons set forth, we reverse the decision of 
the court of appeals and answer the questions presented as 
follows: 
(1) Wisconsin Stat. § 801.11(5) governs service of the 
notice of motion for judgment under § 812.41, and 
service in the present case did not on the record 
before us satisfy § 801.11(5). 
(2) Because the circuit court did not apply the proper law 
relating to service, it erred in refusing to vacate 
the judgment.  
(3)  The automatic stay provisions of 11 U.S.C. § 362(a) 
did not bar a judgment against the garnishee Richter 
Industries for the amount of the debtor's debt. 
No. 
02-1727   
 
34 
 
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. 
 
All work on this opinion was completed on or before June 
30, 2004.  Justice Diane S. Sykes resigned on July 4, 2004. 
 
No.  02-1727.jpw 
 
1 
 
¶63 JON P. WILCOX, J.   (dissenting).  I dissent from 
Parts III and IV of the majority opinion, regarding whether 
service was proper and whether the circuit court erred in 
refusing to vacate the judgment against Richter Industries.  I 
conclude that the applicable statute regarding service of a 
motion 
for 
judgment 
in 
a 
garnishment 
proceeding 
is 
Wis. Stat. § 801.14(2)(2001-02)44 not Wis. Stat. § 801.11(5).  As 
such, I would conclude that service was properly effectuated in 
this case and remand is unnecessary.    
¶64 In this case, Kenosha Hospital attempted to serve Erik 
Richter of Richter Industries with a notice of motion and motion 
for judgment 
pursuant 
to 
Wis. Stat. § 812.41(1). 
 Section 
812.41(1) provides, in pertinent part:   
If the garnishee fails to pay over funds to which the 
creditor is entitled under this subchapter within the 
time required under s. 812.39, the creditor may, upon 
notice to all of the parties, move the court for 
judgment against the garnishee in the amount of the 
unsatisfied judgment plus interest and costs. 
(Emphasis added.)  The parties do not contest the merits of 
Kenosha Hospital's § 812.41(1) motion; rather, they contest 
whether Kenosha Hospital properly served its motion for judgment 
on Richter Industries.   
¶65 Section 812.41(1) simply provides that notice to all 
parties is required when serving a motion for judgment against a 
garnishee.  The statute does not specify what type of notice is 
appropriate, nor does it specify with which statute notice must 
                                                 
44 All references to the Wisconsin Statutes are to the 2001-
02 version. 
No.  02-1727.jpw 
 
2 
 
comply.  Thus, I turn to Wis. Stat. § 812.31(1), which provides:  
"The procedures in this subchapter govern the garnishment of 
earnings, regardless of the amount of the judgment debt.  Except 
as otherwise provided in this subchapter, the general rules of 
practice and procedure in chs. 750 to 758 and 801 to 847 shall 
apply to actions under this subchapter."   
¶66 As there is no dispute that the earnings garnishment 
action was properly commenced, majority op., ¶¶21, 38, I turn to 
§ 801.14(2), which governs the filing of pleadings and other 
papers in civil actions.  This section provides, in pertinent 
part: 
Service upon the attorney or upon a party shall be 
made by delivering a copy or by mailing it to the 
last-known address, or, if no address is known, by 
leaving it with the clerk of the court.  Delivery of a 
copy within this section means:  handing it to the 
attorney or to the party; transmitting a copy of the 
paper by facsimile machine to his or her office; or 
leaving it at his or her office with a clerk or other 
person in charge thereof; or, if there is no one in 
charge, leaving it in a conspicuous place therein; or, 
if the office is closed or the person to be served has 
no office, leaving it at his or her dwelling house or 
usual place of abode with some person of suitable age 
and discretion then residing therein.   
Wis. Stat. § 801.14(2)(emphasis added).  The majority agrees 
that 
Kenosha 
Hospital 
properly 
effectuated 
service 
under 
§ 801.14(2).  Majority op., ¶35.45   
¶67 However, after conceding that the garnishment action 
was properly commenced and Kenosha Hospital's motion for 
                                                 
45 Service upon an attorney would not have been necessary in 
this case as Richter Industries did not obtain counsel until 
after the circuit court entered the default judgment against it.  
See Pet'r Br. at 3.  
No.  02-1727.jpw 
 
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judgment complied with § 801.14(2), the majority nevertheless 
holds that Kenosha Hospital's motion for judgment was improperly 
served.  The majority holds that Kenosha Hospital's motion for 
judgment was improperly served because the majority concludes 
that § 801.11(5)(governing the service of a summons on a 
domestic 
or 
foreign 
corporation) 
rather 
than 
§ 801.14(2)(governing the service and filing of pleadings and 
other papers) is the applicable statute for purposes of serving 
a motion for judgment against a garnishee in a garnishment 
action.  Majority op., ¶39.  The majority makes this holding 
despite the fact that Kenosha Hospital's civil garnishment 
action was properly commenced, and despite the fact that Kenosha 
Hospital served a motion for judgment and not a summons on 
Richter Industries.   
¶68 As 
I 
discussed 
above, 
because 
Kenosha 
Hospital 
properly commenced the garnishment action in this case and 
served 
Richter 
Industries 
with 
a 
motion 
for 
judgment, 
§ 801.14(2) is the appropriate statute governing service of a 
motion for judgment in a garnishment action.  As will be 
demonstrated 
below, 
there 
is 
simply 
no 
legal 
authority 
supporting the majority's conclusion that "the notice of motion 
for judgment in an earnings garnishment procedure [should be] 
served like a summons . . . rather than as a paper in a pending 
action . . . ."  Majority op., ¶39.   
¶69 Because the majority concludes that § 801.11(5) is the 
proper statute governing service of a motion for judgment in a 
garnishment 
action, 
I 
begin 
by 
examining 
the 
text 
of 
No.  02-1727.jpw 
 
4 
 
Wis. Stat. § 801.11 to determine the scope of this statute.  The 
explicit language of § 801.11 provides that its provisions 
govern when a court in this state may exercise "personal 
jurisdiction over a defendant by service of a summons . . . ."  
Wis. Stat. § 801.11.  Here, Kenosha Hospital did not seek to 
serve a summons upon Richter Industries in order to obtain 
personal jurisdiction over Richter Industries; rather, it served 
a motion for judgment against Richter Industries pursuant to 
Wis. Stat. § 812.41 because Richter Industries allegedly failed 
to turn over the appropriate amount of Jesus Garcia's wages.  
Section § 801.11(5) simply does not apply to this case because 
§ 801.11 governs when a summons has been properly served and 
Kenosha Hospital did not attempt to serve a summons on Richter 
Industries. 
¶70 The majority provides no legal authority for the 
proposition that a motion for judgment against a garnishee in a 
properly commenced, pending garnishment proceeding must be 
served as if it were a summons in a completely new action.  
Under Wis. Stat. § 801.14(1), the only time a paper need be 
filed in a proceeding that has been properly commenced as if it 
were a summons is when a party files a "pleading[] asserting new 
or additional claims for relief" against a defendant who is in 
default for failure to appear.  However, at the time Kenosha 
Hospital served its motion for judgment on Richter Industries, 
Richter Industries was not in default for failure to appear.  
Rather, Kenosha Hospital filed its motion for judgment because 
No.  02-1727.jpw 
 
5 
 
Richter Industries allegedly failed to pay the required sums to 
Kenosha Hospital in the garnishment proceeding.   
¶71 What troubles me about the majority opinion is that in 
addition to simply ignoring the explicit language of the 
relevant statutes in this case, the majority provides little 
reasoning and no authority to support its conclusion that 
§ 801.11(5) is the applicable statute in this case.  After 
devoting a lengthy 21 paragraphs to a discussion of various 
statutes governing service that may or may not apply in this 
case and unnecessarily opining as to whether service in the 
present case satisfied one or more of those statutes, the 
majority allocates a mere one paragraph of discussion regarding 
which statute actually applies in this case.  Compare majority 
op., ¶¶16-37 with majority op., ¶38.   
¶72 The majority summarily concludes that § 801.11(5) 
rather than § 801.14(2) is the applicable statute for purposes 
of serving a motion for judgment against a garnishee in a 
garnishment action.  The majority explains, without citing to a 
single source of legal authority, that "[t]he judgment sought 
against Richter Industries, although arising out of an earnings 
garnishment proceedings that was properly commenced, is to some 
extent separate and distinct from the earnings garnishment 
action."  Majority op., ¶38.  Again, without citing to any 
authority, and without explaining why, the majority states that 
it is important that the "heightened statutory protections" of 
§ 801.11(5) apply in this case.  Id.   
No.  02-1727.jpw 
 
6 
 
¶73 Even if I were to agree with the majority's unfounded 
assertion that § 801.11(5) is applicable, despite the fact that 
§ 801.11(5) 
governs 
the 
service 
of 
a 
summons, 
I 
would 
nonetheless conclude that service under § 801.11(5) was proper.  
Section 801.11(5) provides that service may be effectuated upon 
a foreign corporation: 
(a)  By personally serving the summons upon an 
officer, director or managing agent of the corporation 
or limited liability company either within or without 
this state.  In lieu of delivering the copy of the 
summons to the officer specified, the copy may be left 
in the office of such officer, director or managing 
agent with the person who is apparently in charge of 
the office. 
Wis. Stat. § 801.11(5)(a)(emphasis 
added). 
 
The 
majority 
concludes that Kenosha Hospital's service did not comply with 
this statute because the Kenosha plant where the motion was 
served was not the office of Erik Richter.  Majority op., ¶¶28, 
40.  Instead, according to the majority, Kenosha Hospital should 
have served its motion at Richter Industries' principal office 
located in Illinois.  Majority op., ¶¶29-31. 
¶74 Case law establishes that when evaluating whether 
service properly complied with § 801.11(5)(a), courts must ask 
two questions:   
(1) Objectively, was the location where the summons 
and complaint were presented "the office of such 
officer, 
director 
or 
managing 
agent"? 
 
(2) 
Subjectively, was it reasonable for the process server 
to conclude that the person presented with the summons 
and complaint was "the person who is apparently in 
charge of the office"?   
Bar Code Res. v. Ameritech Info. Sys., Inc., 229 Wis. 2d 287, 
292, 599 N.W.2d 872 (Ct. App. 1999).  Addressing the first 
No.  02-1727.jpw 
 
7 
 
factor, Kenosha Hospital attempted to serve Erik Richter of 
Richter Industries by personally serving a copy of its motion 
for judgment at Richter Industries' plant in Kenosha with a 
secretary who stated she was in charge of the office.  This is 
the 
same 
location 
to 
which 
Kenosha 
Hospital 
mailed 
the 
garnishment notice to commence the underlying garnishment action 
pursuant to Wis. Stat. § 812.35(3).  This is also the same 
location at which Erik Richter personally signed the return 
receipt on the original garnishment notice.  Also, a record from 
the Department of Financial Institutions, while indicating that 
Richter 
Industries' 
certificate 
of 
authority 
to 
transact 
business in Wisconsin was revoked as of November 3, 1994, 
nevertheless indicates that Richter's "Registered Agent Office" 
is located at 4910 70th Ave., Kenosha Wisconsin——the location at 
which Kenosha Hospital served the original notice of garnishment 
and attempted to serve its motion for judgment.46  This address 
is listed separately from Richter Industries' "Principle Office 
address," which is located in Illinois.  Under these facts, I 
conclude that objectively, Richter Industries' plant in Kenosha 
was "the office" of Erik Richter for purposes of § 801.11(5)(a).   
¶75 The majority's contrary conclusion is interesting in 
light of the fact it also concludes that service would have been 
proper under § 801.14(2), were that statute applicable.  As 
noted above, § 801.14(2) allows for service of papers in a civil 
action by "leaving it at [the party's] office with a clerk or 
                                                 
46 See http://www.wdfi.org/corporations/crispix/details.asp? 
ID=R028857 (last visited June 25, 2004).   
No.  02-1727.jpw 
 
8 
 
other person in charge thereof[.]"  Wis. Stat. § 801.14(2).  The 
majority fails to explain why service would have satisfied 
§ 801.14(2) but does not satisfy § 801.11(5)(a), which allows 
for service by delivering a copy of a summons "in the office of 
[an] officer, director or managing agent with the person who is 
apparently in charge of the office."  Wis. Stat. § 801.11(5)(a).  
Neither statute specifies that the "office" of an officer, 
director or managing agent of a foreign corporation for purposes 
of service is necessarily located at the principal corporate 
office in the business's state of incorporation.  In short, the 
majority provides no authority for its conclusion that Kenosha 
Hospital 
was 
required 
to 
serve 
Erik 
Richter 
at 
Richter 
Industries' principal office in its state of incorporation.   
¶76 As to the second factor, the majority concludes that 
service was proper under § 801.14(2), which requires service to 
be made by "leaving [the relevant document] at [the party's] 
office with a clerk or other person in charge thereof."  
Wis. Stat. § 801.14(2)(emphasis added).  In contrast, section 
801.11(5)(a) requires service to be made upon "the person who is 
apparently 
in 
charge 
of" 
the 
party's 
office.  
Wis. Stat. § 801.11(5)(a)(emphasis added).  Thus, if the person 
accepting service would qualify as the person "in charge" of the 
party's office for purposes of § 801.14(2), then that person 
would certainly qualify as the person "apparently in charge of" 
the party's office for purposes of § 801.11(5)(a).  In any 
event, "[w]hen a person appears in response to a request for 
someone who may be served with legal process, it will normally 
No.  02-1727.jpw 
 
9 
 
be reasonable for the process server to serve that person."  
Horrigan v. State Farm Ins. Co., 106 Wis. 2d 675, 684, 317 
N.W.2d 474 (1982).  
¶77 Finally, I cannot understand Part IV of the majority 
opinion.  After determining that service on Richter Industries 
was improper under § 801.11(5), majority op., ¶40, the majority 
nonetheless orders a remand to the circuit court to reconsider 
Richter Industries' motion to vacate the default judgment.  
Majority op., ¶43.  However, by concluding that service did not 
comply with § 801.11(5), the majority has in fact determined 
what the circuit court must do on remand, namely, vacate the 
order for default judgment against Richter Industries.   
¶78 The majority's only rationale for concluding that 
service of a motion for judgment in a garnishment action must be 
served as a summons is that a motion for judgment is somehow a 
separate proceeding from the original garnishment action such 
that the "heightened statutory protections" of § 801.11(5) 
apply.  Majority op., ¶38.  As noted supra, § 801.11 governs 
under 
what 
circumstances 
a 
court 
may 
"exercise 
personal 
jurisdiction over a defendant by service of a summons . . . ."  
Wis. Stat. § 801.11 (emphasis added).  By concluding that a 
motion for judgment in a garnishment proceeding must be served 
in accordance with § 801.11(5) and that service here did not 
comply with that section, the majority has essentially concluded 
that the circuit court failed to obtain personal jurisdiction 
over Richter Industries.  If the circuit court failed to obtain 
No.  02-1727.jpw 
 
10 
 
personal jurisdiction over Richter Industries, then there is 
nothing left to consider on remand.   
¶79 Because the applicable statute regarding service of a 
motion for judgment in a garnishment proceeding is § 801.14(2) 
not § 801.11(5), and in any event, service was properly 
effectuated under § 801.11(5)(a), I dissent.   
 
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