2023 WI App 37

COURT OF APPEALS OF WISCONSIN

PUBLISHED OPINION

Case No.: 2022AP746

Complete Title of Case: 

CREDITBOX.COM, LLC,

 PLAINTIFF-RESPONDENT,

 V.

ANTJUAN WEATHERS,

 DEFENDANT-APPELLANT.

Opinion Filed: June 22, 2023

Submitted on Briefs: August 25, 2022

Oral Argument: January 23, 2023

JUDGES: Blanchard, P.J., Kloppenburg, and Graham, JJ.

Concurred:

Dissented:

Appellant

ATTORNEYS: On behalf of the defendant-appellant, the cause was submitted on the 

briefs of Briane F. Pagel of Lawton & Cates, S.C., Madison.

Respondent

ATTORNEYS: On behalf of the plaintiff-respondent, the cause was submitted on the 

brief of David J. Turek and Kevin F. Geary of Gass Turek LLC, 

Milwaukee.
2023 WI App 37

COURT OF APPEALS

DECISION

DATED AND FILED

June 22, 2023

Samuel A. Christensen

Clerk of Court of Appeals

NOTICE

This opinion is subject to further editing. If 

published, the official version will appear in 

the bound volume of the Official Reports. 

A party may file with the Supreme Court a 

petition to review an adverse decision by the 

Court of Appeals. See WIS. STAT. § 808.10 

and RULE 809.62. 

Appeal No. 2022AP746 Cir. Ct. No. 2021SC1581

STATE OF WISCONSIN IN COURT OF APPEALS

CREDITBOX.COM, LLC,

 PLAINTIFF-RESPONDENT,

 V.

ANTJUAN WEATHERS,

 DEFENDANT-APPELLANT.

APPEAL from an order of the circuit court for Dane County: 

STEPHEN E. EHLKE, Judge. Affirmed in part; reversed in part and cause 

remanded. 

Before Blanchard, P.J., Kloppenburg, and Graham, JJ.

¶1 BLANCHARD, P.J. This appeal calls for the interpretation of two 

provisions of the Wisconsin Consumer Act (“the Act”) to determine whether a 

debtor has stated counterclaims against a creditor that survive a motion to dismiss. 
No. 2022AP746

2

The two provisions are: WIS. STAT. § 421.108 (2021-22),1 which provides that 

“[e]very agreement or duty within” the Act imposes on the parties “an obligation of 

good faith in its performance or enforcement”; and WIS. STAT. § 425.102, which 

limits the scope of some claims that may be brought under subchapter I of WIS.

STAT. ch. 425, such as those alleging unconscionability. 

¶2 CreditBox.com LLC sued Antjuan Weathers, alleging that Weathers 

defaulted on a loan agreement. Weathers responded by filing good faith and 

unconscionability counterclaims under the Act. The circuit court granted 

CreditBox’s motion for voluntary dismissal of its claim.2 The court also granted 

CreditBox’s motion to dismiss both of Weathers’ counterclaims, which are the 

rulings challenged by Weathers that we address. 

¶3 The circuit court dismissed Weathers’ good faith counterclaim on the 

ground that it is not supported by sufficient allegations of fact. We reverse that 

ruling based on our conclusion that one set of allegations in the counterclaim is 

sufficient to state a claim under WIS. STAT. § 421.108, although we separately 

conclude that two other sets of allegations are not sufficient.

¶4 The circuit court dismissed the unconscionability counterclaim based 

on its interpretation of the statutory scope rule, WIS. STAT. § 425.102, which states 

that a consumer may bring such a claim “only in response to ‘actions or other 

 

1

 All references to the Wisconsin Statutes are to the 2021-22 version unless otherwise 

noted.

2

 On appeal, Weathers challenges the circuit court ruling granting CreditBox’s motion for 

voluntary dismissal of its claim, but only if we reject Weathers’ argument that the unconscionability 

counterclaim should not be dismissed. For reasons we explain in the text below, we agree with 

Weathers that the unconscionability counterclaim should not be dismissed based on the arguments 

now advanced by CreditBox. Therefore we deem Weathers to have abandoned his challenge to 

voluntary dismissal of the CreditBox action and accordingly we affirm on that issue.
No. 2022AP746

3

proceedings brought by a creditor to enforce rights arising from consumer credit 

transactions.’” See Duncan v. Asset Recovery Specialists, Inc., 2022 WI 1, ¶¶27-

28, 400 Wis. 2d 1, 968 N.W.2d 661 (applying § 425.102 to determine that plaintiff 

could not bring unconscionability claim under WIS. STAT. § 425.107 because 

plaintiff brought it “‘via a separate civil lawsuit,’” and not “in response to ‘actions 

or other proceedings brought by a creditor’” (quoted authority omitted)). The circuit 

court here reasoned that Weathers cannot pursue this counterclaim against 

CreditBox because the dismissal of CreditBox’s claim left no “actions or other 

proceedings brought by a creditor” pending against Weathers. We reverse this 

ruling. We conclude that § 425.102 does not require dismissal for the following 

reasons: when CreditBox filed its lawsuit against Weathers to enforce the loan 

agreement, this triggered the potential for an unconscionability counterclaim, 

regardless of the fact that CreditBox moved for voluntary dismissal of its claim 

against Weathers, and Duncan is distinguishable on these facts. 

BACKGROUND

¶5 In June 2015, CreditBox and Weathers entered into an agreement for 

a $500 loan. Weathers was to repay the principal and finance charges by making 

52 weekly installments of $37.61 each, with the option to pay down the loan early. 

According to the loan agreement, its annual percentage interest rate would be 

399.0250%. As a result, if Weathers followed the payment plan and did not make 

early payments he would end up paying a total of $1,955.72, including $1,455.72 in 

finance charges. 

¶6 CreditBox initiated a small claims action against Weathers, alleging 

that Weathers failed to make some of the payments required under the loan 

agreement. CreditBox sought a money judgment totaling $2,219.40, the alleged 

outstanding principal, interest, and fees. 
No. 2022AP746

4

¶7 On May 11, 2021, Weathers, pro se, filed a preprinted small claims 

answer in which he checked the boxes indicating that he did not contest CreditBox’s 

claims and did not have a counterclaim. Accordingly, the clerk of court promptly 

entered a judgment against Weathers that totaled $2,579.90. 

¶8 Weathers then reversed course. Now represented by counsel, on 

May 28, 2001, he moved to vacate the judgment and reopen the case. This motion 

was accompanied by an affidavit. Weathers averred that he was “unsure whether I 

ever defaulted on the loan in fact, because payments were to be deducted [by 

CreditBox] from my bank account automatically, and to my knowledge they were 

deducted.” On June 22, 2021, the court commissioner granted Weathers’ motion, 

vacating the judgment and reopening the small claims proceeding. 

¶9 On July 7, 2021, CreditBox moved the court commissioner for 

voluntary dismissal of its action. CreditBox argued that it was entitled to dismissal 

under WIS. STAT. § 805.04(1) because Weathers had not filed a responsive 

pleading.3 In the alternative, CreditBox argued that it was entitled to a court-ordered 

dismissal under § 805.04(2) because: no counterclaims by Weathers were pending 

against it, the case was at an early stage, CreditBox had diligently pursued dismissal, 

and dismissal posed no risk of duplicative litigation.4 

¶10 On July 19, 2021, Weathers filed a brief opposing CreditBox’s motion 

for voluntary dismissal. Weathers also filed an amended answer that included the 

 

3

 Under WIS. STAT. § 805.04(1), a plaintiff may dismiss its action without order of the 

court by filing a notice of dismissal “before service by an adverse party of responsive pleading or 

motion.”

4

 Under WIS. STAT. § 805.04(2), “Except as provided in sub. (1), an action shall not be 

dismissed at the plaintiff’s instance save upon order of court and upon such terms and conditions 

as the court deems proper.”
No. 2022AP746

5

two counterclaims against CreditBox based on provisions in the Act: a good faith 

claim under WIS. STAT. § 421.108 and an unconscionability claim under WIS. STAT.

§ 425.107. On August 2, 2021, CreditBox filed a motion to dismiss Weathers’ 

counterclaims pursuant to WIS. STAT. § 802.06(2)(a)6., on the grounds that each 

failed to state a claim upon which relief may be granted. 

¶11 The circuit court, on de novo review of court commissioner rulings, 

granted CreditBox’s motions for voluntary dismissal of its claim and for dismissal 

of both of Weathers’ counterclaims. 

DISCUSSION

¶12 Two primary questions are presented on appeal. First, did Weathers 

adequately plead a good faith counterclaim under WIS. STAT. § 421.108? We 

conclude that one set of allegations states a claim, but the other two sets do not. 

Second, can Weathers pursue an unconscionability counterclaim against CreditBox 

under WIS. STAT. § 425.107, consistent with Duncan, given the fact that CreditBox 

moved for voluntary dismissal of its action before Weathers brought the 

unconscionability counterclaim? We conclude that he can.

¶13 The following general legal standards apply across issues.

¶14 We review de novo a circuit court decision resolving a motion to 

dismiss a complaint based on the argument that the complaint does not state a claim 

upon which relief can be granted. Data Key Partners v. Permira Advisers LLC, 

2014 WI 86, ¶17, 356 Wis. 2d 665, 849 N.W.2d 693. “When we review a motion 

to dismiss, factual allegations in the complaint are accepted as true for purposes of 

our review,” as well as all “reasonable inferences” that arise from the allegations. 

Id., ¶¶18-19. “[A] court cannot add facts in the process of construing a complaint” 
No. 2022AP746

6

and “legal conclusions stated in the complaint are not accepted as true, and they are 

insufficient to enable a complaint to withstand a motion to dismiss.” Id., ¶19. “In 

order to satisfy WIS. STAT. § 802.02(1)(a), a complaint must plead facts, which if 

true, would entitle the plaintiff to relief.” Data Key, 356 Wis. 2d 665, ¶21. Put 

another way, plaintiffs must “allege facts that plausibly suggest they are entitled to 

relief.” Id., ¶31.

¶15 “Interpretation and application of statutes and case law to a set of facts

are matters of law that we decide de novo.” Meyers v. Bayer AG, 2007 WI 99, ¶22, 

303 Wis. 2d 295, 735 N.W.2d 448.

¶16 “[S]tatutory interpretation ‘begins with the language of the statute. If 

the meaning of the statute is plain, we ordinarily stop the inquiry.’” State ex rel. 

Kalal v. Circuit Ct. for Dane Cnty., 2004 WI 58, ¶45, 271 Wis. 2d 633, 681 N.W.2d 

110 (quoted source omitted). We interpret statutory language “in the context in 

which it is used; not in isolation but as part of a whole; in relation to the language 

of surrounding or closely-related statutes.” Id., ¶46. “Statutory language is read 

where possible to give reasonable effect to every word, in order to avoid 

surplusage.” Id.

I. Weathers’ Good Faith Counterclaim Under WIS. STAT. § 421.108 

¶17 To date, the Act’s good faith provision has not been interpreted in a 

precedential opinion. We first explain basic features of the provision. Then we 

provide additional background and present the parties’ arguments and explain our 

conclusions.
No. 2022AP746

7

A. WISCONSIN STAT. § 421.108 

¶18 WISCONSIN STAT. § 421.108 provides:

Obligation of Good Faith. Every agreement or 

duty within [WIS. STAT.] chs. 421 to 427 imposes an 

obligation of good faith in its performance or enforcement. 

“Good faith” means honesty in fact in the conduct or 

transaction concerned and the observance of reasonable 

commercial standards of fair dealing.

See WIS. STAT. § 421.101 (defining the Act as constituting chapters 421 to 427 of 

the Wisconsin Statutes).5 The first sentence of § 421.108 addresses the proper 

sources of the good faith obligation and the second sentence defines the nature of 

the obligation. We address the two sentences in turn.6

¶19 As Weathers argues and CreditBox ultimately concedes, the only 

reasonable interpretation of the first sentence of WIS. STAT. § 421.108 is that it 

imposes its obligation of good faith on the parties for performance or enforcement 

 

5

 CreditBox does not dispute that provisions of the Act govern the transaction here because 

it was a “consumer loan.” See WIS. STAT. § 421.301(12) (defining “consumer loan” transactions 

subject to the Act). Nor does CreditBox dispute the general proposition that a consumer may state 

a cause of action against a lender based on WIS. STAT. § 421.108. See WIS. STAT. § 425.301(2) 

(“Any right or obligation declared” in the Act “is enforceable by action unless the provision 

declaring it specifies a different and limited effect.”). 

6

 We observe that the Act provides definitions for two terms used in WIS. STAT.

§ 421.108—“agreement” and “transaction”—but those definitions have no bearing on the 

arguments of the parties on appeal. See WIS. STAT. § 421.301(3) (“‘Agreement’ means the bargain 

of the parties in fact as found in their language or by implication from other circumstances including 

course of dealing or usage of trade or course of performance.”), § 421.301(44) (“‘Transaction’ 

means an agreement between 2 or more persons, whether or not the agreement is a contract 

enforceable by action, and includes the making of and the performance pursuant to that 

agreement.”).
No. 2022AP746

8

of both (1) agreements that are subject to the Act and (2) duties that are defined in 

the Act. We now explain why we agree.7

¶20 The wording of the first sentence may be awkward in referring to 

“[e]very agreement ... within” the Act. But we see no other way to give reasonable 

meaning to the more complete clause—“[e]very agreement ... within [WIS. STAT.] 

chs. 421 to 427 imposes an obligation of good faith in its performance or 

enforcement”—than to interpret it to require good faith in the performance or 

enforcement of agreements that are subject to the Act. In other words, “[e]very 

agreement ... within” the Act means every agreement that is subject to the Act. 

Notably, WIS. STAT. § 421.108 draws a distinction between “agreement or duty,” 

and we avoid statutory interpretations that treat statutory terms as surplusage. See 

Kalal, 271 Wis. 2d 633, ¶46. 

¶21 Our construction that WIS. STAT. § 421.108 involves both contractbased and Act-based obligations also gives parallel meanings to parallel clauses. 

We refer to the clause “[e]very ... duty within [WIS. STAT.] chs. 421 to 427 imposes 

an obligation of good faith in its performance or enforcement,” which means that 

duties, as well as agreements, must be performed or enforced in good faith. Thus, 

just as “[e]very agreement ... within” the Act refers to every agreement that is 

 

7

 CreditBox’s position on this issue has shifted. In its briefing on appeal, CreditBox argues 

that the only obligations WIS. STAT. § 421.108 creates are those defined in the Act, and not 

obligations contained in agreements subject to the Act. Relying in part on statements in Parent v. 

Home Depot U.S.A., Inc., No. 09-C-951, 2011 WL 2650725 (E.D. Wis. July 6, 2011), CreditBox 

asserts that § 421.108 “acts as a rule of construction by merely codifying the general common law 

duty of good faith and fair dealing for obligations imposed by the Wisconsin Consumer Act,” and 

similarly asserts that the obligation of good faith “extends only to obligations found in the Act 

itself.” In the same vein, CreditBox states that “the purpose of [§] 421.108” is “to merely 

compl[e]ment other obligations in the Wisconsin Consumer Act by confirming that those 

obligations must be performed in good faith.” But at oral argument CreditBox acknowledged that 

obligations of good faith established under § 421.108 can also arise from provisions in agreements 

subject to the Act. To the extent that some statements in Parent could be interpreted to support 

CreditBox’s initial position we disagree for the reasons given in the text.
No. 2022AP746

9

subject to the Act, so too “[e]very ... duty within” the Act refers to every 

requirement of the Act. 

¶22 Our interpretation of the first sentence of WIS. STAT. § 421.108 is also 

consistent with the Act’s explicit “rules of construction,” which is a proper 

interpretive aid. See, e.g., Roberts v. T.H.E. Ins. Co., 2016 WI 20, ¶28, 367 Wis. 2d 

386, 879 N.W.2d 492; Kalal, 271 Wis. 2d 633, ¶49 (recognizing that legislative 

statements of purpose or scope can inform a plain-meaning statutory interpretation). 

The Act states that it “shall be liberally construed and applied to promote” 

“underlying purposes and policies” that include “protect[ing] customers against 

unfair, deceptive, false, misleading[,] and unconscionable practices by merchants” 

and “permit[ting] and encourag[ing] the development of fair and economically 

sound consumer practices in consumer transactions.” WIS. STAT. § 421.102(1), 

(2)(b)-(c). Our construction identifies an expansive protection for consumers and 

serves the legislature’s expressly stated purposes because it requires good faith in 

the performance or execution of both agreement-created duties and Act-created 

duties.

¶23 It is true that under Wisconsin common law “‘[e]very contract’”—not 

only contracts that are subject to the Act—“‘implies good faith and fair dealing 

between the parties to it.’” See Beidel v. Sideline Software, Inc., 2013 WI 56, ¶27, 

348 Wis. 2d 360, 842 N.W.2d 240 (quoting Chayka v. Santini, 47 Wis. 2d 102, 107 

n.7, 176 N.W.2d 561 (1970)). For this reason, one might wonder on first 

encountering WIS. STAT. § 421.108 about the need for a seemingly redundant good 

faith obligation that addresses only the subset of contracts that are subject to the Act. 

But as we now explain, when we turn to the second sentence of § 421.108 defining 

the nature of the obligation, the definition differs in some respects from the common 
No. 2022AP746

10

law good faith obligation, although there is some overlap in meaning between the 

two.8 

¶24 The second sentence defines good faith to mean “honesty in fact in 

the conduct or transaction concerned and the observance of reasonable commercial 

standards of fair dealing.” This has two parts: “honesty in fact in the conduct or 

transaction concerned” and “reasonable commercial standards of fair dealing.” 

Applications of the two parts will no doubt overlap in some circumstances. For 

example, as Weathers points out, reasonable commercial standards of fair dealing 

will presumably often call for honesty in fact. For analytical clarity, however, we 

address them separately, beginning with the honesty-in-fact requirement. 

¶25 We conclude that it is appropriate to interpret the honesty-in-fact 

requirement based on a formulation used in the context of the common law 

obligation. In discussing the common law obligation, this court has quoted without 

criticism the following definition contained in a prior version of WIS JI—

CIVIL 3044, and the definition appears to us to be a sound interpretation of the 

statutory language:

 

8

 Caution is required in borrowing or comparing forms of “good faith” referred to in 

Wisconsin’s common law and statutes. A two-justice plurality of our supreme court, in making a 

point not disputed by the three-justice concurrence, has observed that concepts of “good faith” and 

“bad faith” can assume different meanings in different statutory and common law contexts. See

Koss Corp. v. Park Bank, 2019 WI 7, ¶32, 385 Wis. 2d 261, 922 N.W.2d 20 (lead opinion of 

Roggensack, C.J.). The merits discussion in Koss is not on point here, because that case involved 

interpretation of the Uniform Fiduciaries Act, in which the legislature has adopted a definition of 

acts done “in good faith” in that distinct context. See WIS. STAT. § 112.01(1)(c) (“A thing is done 

‘in good faith’ within the meaning of this section, when it is in fact done honestly, whether it be 

done negligently or not.”). Bearing that caution in mind, we note in the text how some of the 

language in WIS. STAT. § 421.108 mirrors the common law obligation while other aspects differ.
No. 2022AP746

11

[H]onesty in fact in the conduct or transaction concerned ... 

is ... an honest intention to abstain from taking unfair 

advantage of another, through technicalities of law, by 

failure to provide information or to give notice, or by other 

activities which render the transaction unfair. 

Foseid v. State Bank of Cross Plains, 197 Wis. 2d 772, 793 n.14, 541 N.W.2d 203 

(Ct. App. 1995).9 This “taking unfair advantage” definition gives meaning to the 

statutory phrase “honesty in fact,” in that a plaintiff needs to show that the defendant 

had an intention that was not honest and that this was aimed at gaining an unfair 

advantage.10 We reject a contention that Weathers suggested at oral argument, 

namely, that every failure by a creditor to fulfill an obligation created as part of a 

consumer credit transaction is, by definition, a failure to act with “honesty in fact in 

the conduct or transaction concerned.” We see no basis for such an interpretation 

of WIS. STAT. § 421.108. This leaves the balance of the second sentence of 

§ 421.108, to which we now turn. 

¶26 “[T]he observance of reasonable commercial standards of fair 

dealing,” which on its face refers to the violation of norms or standards of 

commercial usage, may overlap to a degree with the common law obligation. But 

it is clearly its own standard. As an example of a difference, this court has explained 

that, under the common law obligation, “‘bad faith’” is conduct defined in the 

following broad terms: it “‘violate[s] community standards of decency, fairness or 

 

9

 The court of appeals in Foseid v. State Bank of Cross Plains, 197 Wis. 2d 772, 541 

N.W.2d 203 (Ct. App. 1995), did not cite which version of WIS JI—CIVIL 3044 it relied on.

10

 We observe for context that the honesty-in-fact requirement in WIS. STAT. § 421.108 

aligns with the general definition of “good faith” for purposes of the uniform commercial code as 

a whole as adopted in Wisconsin, which limits the definition of “good faith” to this concept: 

“‘Good faith’ means honesty in fact in the conduct or transaction concerned.” WIS. STAT.

§ 401.201(2)(k).
No. 2022AP746

12

reasonableness.’” Foseid, 197 Wis. 2d at 796 (quoting RESTATEMENT (SECOND)

OF CONTRACTS § 205 cmt. a (Am. L. Inst. 1981));11 see also id. (enforcement of the 

obligation “is intended as a guarantee against ‘arbitrary or unreasonable conduct’

by a party” to a contract (quoting WIS JI—CIVIL 3044)). The common law 

obligation is broader than the fair-dealing requirement of WIS. STAT. § 421.108. 

Under the statutory standard, parties must adhere to “reasonable commercial 

standards of fair dealing,” which requires the application of an objective set of 

standards that govern fair dealing in commercial practices.

¶27 It is self-evident that determining the substance of the statutory fairdealing requirement that applies in a given case will present an issue of fact. See 

Schaller, 131 Wis. 2d at 402 (addressing the obligation of good faith in the uniform 

commercial code, WIS. STAT. § 401.203, and observing that “[t]he issue of good 

faith is generally for the jury but may in a proper case be decided as a matter of law” 

in addressing appeal from grant of summary judgment). Therefore, allegations 

intended to support a claim that the fair-dealing requirement was violated cannot 

plausibly state a claim if the allegations do not, at a minimum, provide a basis to 

infer the existence of some relevant reasonable commercial standard of fair dealing 

that could be violated, whether that standard is stated in the Act or is instead found 

to exist in a pertinent commercial setting. It may not be necessary for a complaint 

alleging a violation of the fair-dealing requirement to explicitly refer to a relevant 

objective standard to survive a motion to dismiss. But such a complaint that lacks 

 

11

 Wisconsin case law addressing the common law obligation of good faith ties it to the 

RESTATEMENT (SECOND) OF CONTRACTS § 205 (Am. L. Inst. 1981), which states, “Every contract 

imposes upon each party a duty of good faith and fair dealing in its performance and its 

enforcement.” See Beidel v. Sideline Software, Inc., 2013 WI 56, ¶10 n.8, 348 Wis. 2d 360, 842 

N.W.2d 240 (favorably citing reference to Restatement § 205 in the court of appeals opinion under 

review); Wisconsin Natural Gas Co. v. Gabe’s Const. Co., 220 Wis. 2d 14, 21, 582 N.W.2d 118 

(Ct. App. 1998) (citing RESTATEMENT (SECOND) OF CONTRACTS § 205); Foseid, 197 Wis. 2d at 

796-97 (relying on two official comments to Restatement § 205).
No. 2022AP746

13

reference to a relevant standard (not contained in the Act) risks dismissal because a 

relevant standard cannot be inferred—that is, no relevant objective standard 

suggests itself based on all reasonable inferences that arise from the allegations.

¶28 In sum regarding the content of the Act’s good faith provision, parties 

are obligated to act in good faith in the performance or enforcement of an agreement 

subject to the Act and to the performance or enforcement of a provision of the Act. 

Further, the honesty-in-fact requirement is violated when a party lacks an honest 

intention to abstain from taking unfair advantage of another by activities that render 

the transaction unfair, and the fair-dealing requirement is violated when a party does 

not observe reasonable commercial standards of fair dealing, which contemplates 

the application of an objective set of standards.

¶29 Here, it is unclear what the content would be of the set of reasonable 

commercial standards of fair dealing (not contained in the Act) that Weathers would 

apply to CreditBox’s alleged conduct to establish one or more violations of the fairdealing requirement. That is, the counterclaim does not suggest a relevant objective 

standard not set by the Act itself. Weathers acknowledges that at trial he would 

“likely” have to elicit expert testimony to show that CreditBox’s conduct was “not 

reasonable commercial behavior for a short-term consumer lender.” But, Weathers’ 

argument continues, for purposes of a motion to dismiss, the counterclaim contains 

allegations “that are clearly potentially unreasonable within the field of short-term 

consumer lending.” CreditBox takes the position that the counterclaim fails to state 

facts from which it could be inferred that its conduct “was unreasonable or violated 

any kind of standards, [including] commercial standards, or was dishonest in fact.” 
No. 2022AP746

14

B. Additional Background and Analysis 

¶30 Weathers’ counterclaim alleges three sets of actions or omissions by 

CreditBox that Weathers argues constituted violations of the obligation of good faith 

under WIS. STAT. § 421.108: (1) an attempt by CreditBox to make an allegedly 

unscheduled electronic funds transfer (EFT) withdrawal from Weathers’ bank 

account because a prior withdrawal attempt by CreditBox had been unsuccessful 

(“the EFT withdrawal allegations”); (2) “charging off” the debt 60 days after the 

alleged first day of default, even though a federal guidance document (not 

referenced in the counterclaim) suggests that charge offs are to occur 120 days after 

a missed payment, and without providing Weathers with more notice (“the chargeoff allegations”); and (3) accelerating the debt and filing its action against Weathers 

before providing him with notice and an opportunity to cure, in violation of the loan 

agreement and WIS. STAT. § 425.105(1), which in some circumstances requires the 

filing of the 15-day notice described in WIS. STAT. § 425.104 (“the notice of right 

to cure allegations”). We agree with CreditBox that, even assuming as true the 

factual allegations in the counterclaim and all reasonable inferences in Weathers’ 

favor, both the EFT withdrawal allegations and the charge-off allegations fail to 

state a claim upon which relief may be granted. See Data Key Partners, 356 Wis. 2d 

665, ¶31 (dismissal on a motion to dismiss is appropriate when the plaintiff fails to 

“allege facts that plausibly suggest” entitlement to relief). In contrast, we agree with 

Weathers that the set of allegations surrounding failure to provide notice of default 

and a right to cure, including the alleged violation of § 425.105(1), survives the 

motion to dismiss. We address each set of allegations in turn.
No. 2022AP746

15

The EFT Withdrawal Allegations

¶31 The counterclaim includes the following pertinent allegations. 

Weathers “originally arranged” through an “EFT authorization” agreement with 

CreditBox to have payments withdrawn from his bank account “via electronic funds 

transfer (EFT)” (sometimes referred to as an “EFT payment”). The weekly EFT 

payments called for in the loan agreement and the EFT authorization “began and 

were not canceled by Weathers.” “If payments commenced weekly on June 26, 

2015 (a Sunday), then assuming that [each] payment was due on the first day of 

each subsequent week ... payments would have been due June 26, July 4, 11, 18, 

and 25; August 1, 8, 15, 22, and 29; and September 5, 12, 19 and 26, for a total of 

14 weekly payments due between June 26 and September 26, 2015.”12 CreditBox 

“alleges [that] Weathers made four total payments, all apparently before August 7, 

2015,” at which time “a payment was attempted to be withdrawn and was returned.” 

“August 7 was not a date that had originally been scheduled for a payment at the 

time of entering into the loan agreement.” On August 7, CreditBox attempted an 

EFT payment that was “due prior to August 7, and [the August 7 attempt] was a 

second or subsequent attempt. This second or subsequent attempt upon information 

and belief caused Weathers to incur charges at his bank.” “[N]o agreement between 

Weathers and [CreditBox] allowed [CreditBox] to make subsequent attempts to 

withdraw by EFT a payment that had previously been declined.” 

¶32 Weathers now argues that these allegations state a claim that 

CreditBox violated WIS. STAT. § 421.108 by attempting to take an EFT payment 

from his bank account on August 7, 2015, which CreditBox “was not scheduled” to 

 

12

 As we explain in the text below, these allegations misapply the terms of the EFT 

authorization form to the 2015 calendar. 
No. 2022AP746

16

take, and that the August 7 activity therefore amounted to an “attempt[] [at] a second 

withdrawal of a payment without a contractual right to do so.” CreditBox responds 

in part that, under the terms of an EFT authorization form that Weathers signed at 

the time he took out the loan, Weathers explicitly authorized CreditBox to take all 

actions that Weathers alleges in the counterclaim. Therefore, the CreditBox 

argument continues, based on the pleadings CreditBox’s actions could not violate 

CreditBox’s obligation of good faith under § 421.108. 

¶33 We assume without deciding that the EFT withdrawal allegations 

could state a claim for a violation of WIS. STAT. § 421.108 if Weathers had not 

signed the EFT authorization form. But dismissal is appropriate when the form is 

taken into account.

¶34 CreditBox submitted to the court commissioner as an exhibit a twopage EFT authorization form entitled “Optional, Revocable Electronic Fund 

Transfer Authorization.” It purports to have been created by CreditBox and also 

reflects execution by Weathers on the same day that Weathers executed the loan 

agreement.13 By its terms, the EFT authorization form “allows a preauthorized 

electronic fund transfer payment[,]” withdrawn by CreditBox from Weathers’ bank 

account, starting on June 26, 2015, and “on [w]eekly intervals thereafter.” It further 

states that “[i]f there are insufficient funds in [Weathers’] Account for any EFT 

Payment to be made on any EFT Payment Date, [CreditBox] may present the debit 

for such EFT Payment to [Weathers’] Account up to two times thereafter ... to 

process the scheduled payment.” In other words, the form authorized CreditBox to 

 

13

 For ease of reference, and following the arguments of the parties, we discuss the EFT 

authorization form as it were an agreement separate from the loan agreement, but our analysis 

would be the same if the EFT authorization form were considered to be a part of, or incorporated 

into, the loan agreement.
No. 2022AP746

17

attempt an out-of-schedule EFT payment from Weathers’ bank account up to two 

times after a scheduled attempt was stymied by insufficient funds. 

¶35 The circuit court determined that it could rely on the EFT 

authorization form to resolve the motion to dismiss in favor of CreditBox, even 

though the form is not attached to Weathers’ counterclaim pleading. The court 

based this reliance on Soderlund v. Zibolski, 2016 WI App 6, 366 Wis. 2d 579, 874 

N.W.2d 561 (2015), which adopts the incorporation-by-reference doctrine. This 

doctrine permits courts to consider a document attached to a motion to dismiss 

without converting the motion to one for summary judgment, so long as the 

document is referred to in the plaintiff’s complaint, it is central to the plaintiff’s 

claim, and its authenticity has not been disputed. Id., ¶37. The purpose of the 

doctrine is to “‘prevent[] a plaintiff from evad[ing] dismissal ... simply by failing to 

attach to his complaint a document that prove[s] his claim has no merit.’” See id., 

¶38 (quoted source omitted).

¶36 Weathers fails to address the EFT authorization form in his opening 

brief on appeal, even though it provided a basis for the circuit court ruling. Only in 

his reply brief does he briefly offer limited arguments, which are submitted too late. 

See A.O. Smith Corp. v. Allstate Ins. Cos., 222 Wis. 2d 475, 492, 588 N.W.2d 285 

(Ct. App. 1998) (we need not address arguments raised for the first time in a reply 

brief). We are not required to address otherwise undeveloped or abandoned 

arguments simply because they were discussed at oral argument, see id. at 492-93, 

but we now make additional observations based on references in Weathers’ reply 

brief on appeal and discussion at oral argument.

¶37 Without referencing Soderlund in his briefing or during oral 

argument, Weathers asserts that we cannot rely on the EFT authorization form 
No. 2022AP746

18

because he did not refer to it in his counterclaim. This is not accurate. As 

summarized above, the counterclaim alleges that Weathers “originally arranged” 

with CreditBox “to have payments taken out of his [bank] account ... via electronic 

funds transfer (EFT),” referring to this “arrange[ment]” as an “EFT authorization.” 

¶38 Weathers suggests that the circuit court “prevent[ed]” him from 

addressing the EFT authorization form, but that suggestion is not supported by any 

part of the record that he cites or that we independently identify. Further, the record 

reflects that CreditBox submitted the form to the court commissioner, before the 

circuit court’s de novo review, and therefore counsel for Weathers was presented 

with this document even before the circuit court litigation. 

¶39 Further, when the EFT authorization form is brought into the picture, 

Weathers’ theory of liability for this set of allegations collapses, at least as best we 

understand the theory. Weathers concedes, by failing to address it, the following 

dispositive argument made by CreditBox, based on the 2015 calendar and the 

unambiguous terms of the EFT authorization form. See United Coop. v. Frontier 

FS Coop., 2007 WI App 197, ¶39, 304 Wis. 2d 750, 738 N.W.2d 578 (appellant’s 

failure to respond in reply brief to an argument made in response brief may be taken 

as a concession).

¶40 CreditBox points out that August 7, 2015, was six weeks to the day

after the June 26 start date provided in the EFT authorization form, and therefore 

August 7 was a scheduled EFT payment date contemplated in the EFT authorization 

form. These facts, incorporated by reference into the counterclaim, directly 

undermine Weathers’ theory that CreditBox attempted to collect an EFT payment 

on a date that was not scheduled for payment, and that the alleged August 7 attempt 

to collect an EFT payment must have been a second or subsequent attempt that could 
No. 2022AP746

19

have been justified only if CreditBox had made a prior attempt at an EFT payment 

that was stymied by insufficient funds in Weathers’ bank account. Naturally, in 

order to determine whether Weathers has stated “a plausible claim,” we must 

construe the allegations consistently with the 2015 calendar. See Data Key 

Partners, 356 Wis. 2d 665, ¶¶38, 39, 56 (plaintiff must state “plausible claim”).

¶41 As a rejoinder, Weathers notes that the counterclaim does not allege 

that there were insufficient funds in the bank account on August 7. But that does 

not matter, because the only basis for the good faith claim appears to be the 

suggestion that an August 7 attempt to collect an EFT payment was improper, and 

under the terms of the authorization form it would have been proper. Weathers 

contends that the counterclaim describes an “illegal transaction,” but he fails to 

support that position with allegations in the counterclaim or reasonable inferences 

arising from those allegations. 

¶42 In sum, the EFT withdrawal allegations are not sufficient to support a 

plausible claim that CreditBox lacked an “honest intention to abstain from taking 

unfair advantage” of Weathers, see Foseid, 197 Wis. 2d at 793 n.14, or that 

CreditBox failed to observe a “reasonable commercial standard[] of fair dealing” 

that could apply in this context.14 

 

14

 We emphasize that our rulings regarding the EFT withdrawal allegations, as well as the 

charge-off allegations addressed in the following subsection of this opinion, are limited to 

determinations that Weathers fails to state a claim under WIS. STAT. § 421.108 based on the sets of 

allegations currently pleaded in the counterclaim. We express no opinion as to whether similar 

allegations could state a claim in other cases, depending on the details, nor whether the circuit court 

in this case following remand could or should permit amendment of Weathers’ counterclaim 

regarding the EFT withdrawal or charge-off allegations. If the potential amendment topic is 

litigated following remand, the circuit court is free to make its determinations based on the 

applicable legal standards and any discretionary decisions properly available to the court. In a 

similar vein, we express no view about rulings that the circuit court might be asked to make, if the 

good faith claim survives to the trial stage, about potential motions in limine or evidentiary rulings. 
No. 2022AP746

20

The Charge-off Allegations

¶43 Weathers’ charge-off allegations rest in part on allegations already 

summarized above, namely, that Weathers made four total payments before 

August 7, 2015. Weathers submits that one reasonable inference from these 

allegations is that the last EFT payment occurred four weeks after the first payment 

date of June 26, suggesting that the first default occurred one week after that, on 

July 24—the first day on which a payment should have been made but allegedly 

was not.15 

¶44 Some or all of the following additional allegations in the counterclaim 

may be pertinent to Weathers’ theory of the charge-off allegations. On 

September 22, 2015, CreditBox “charged off” Weathers’ debt under the loan.16 This 

represented a determination by CreditBox that it “was unlikely to be paid in full on 

the debt, while [CreditBox was] still retaining the right to attempt to collect that 

debt.” Before or at that time, CreditBox “‘accelerated’ the debt, which means that 

[it] declared the entire amount due and owing in one lump sum, rather than payable 

in installments over time.” “[T]he last contact [that CreditBox] attempted with 

Weathers was a phone call and voicemail message left on September 14, 2017,” and 

after the alleged charge off CreditBox “made little to no effort to notify Weathers 

that it believed he was in default or that payment of any amounts were still required.” 

“Between 2017” and the day CreditBox filed its claim against Weathers in March 

2021, Weathers “received no communications from [CreditBox] or on [its] behalf 

 

15

 Putting aside Weathers’ misreading of the 2015 calendar, under his own theory, the date 

of last payment would have been July 17, making July 24 the alleged date of first default. 

16

 See Charge Off, BLACK’S LAW DICTIONARY (11th ed. 2019) (“To treat (an account 

receivable) as a loss or expense because payment is unlikely; to treat as a bad debt.”). Weathers’ 

theory of liability rests in part on the premise that his credit history must have been harmed by the 

charge off. 
No. 2022AP746

21

... which informed him that his debt was not paid in full or which informed him that 

he had a debt that continued to accrue interest at 399.0250% per year.” As of 

September 22, 2015, “only $24.44 of Weathers’ payments had been applied to the 

principal of this debt. This means that Weathers still owed principal of $476 as of 

September 22, 2015.” CreditBox’s claim against Weathers “was for $2,219.40,” 

which “means that $1,743.40 of the debt was presumably interest that accrued over 

the 2,029 days that the debt was allegedly owed.” 

¶45 Although not referenced in the counterclaim, Weathers bases his 

theory of this aspect of alleged good faith liability on what he characterizes as a 

“recommended” time period for charge offs contained in a bulletin issued by the 

federal Office of the Comptroller of the Currency. See OFFICE OF COMPTROLLER 

OF THE CURRENCY, OCC BULL. NO. 2000-20, UNIFORM RETAIL CREDIT 

CLASSIFICATION AND ACCOUNT MANAGEMENT POLICY: POLICY IMPLEMENTATION

(2000). The bulletin states that the office “generally requires that closed-end loans 

be charged off when [they are] 120 days past due.”17 See id. 

¶46 With that background, Weathers argues that, given the 120-day 

federal guidance reference, CreditBox “acted outside of reasonable commercial 

standards when it charged off the loan” at 60 days “past due,” and did not 

sufficiently communicate with him regarding the charge off.18

 

17

 The Law Dictionary, featuring Black’s Law Dictionary, 2d ed., defines a “closed-end 

loan” in pertinent part as a “consumer installment loan” in which “the borrower cannot alter the 

(1). number and amount of installments, (2). maturity date, and/or (3). credit terms.” 

https://thelawdictionary.org/closed-end-loan/ (last visited July 28, 2023); see also WIS. STAT.

§ 421.301(27) (defining “open-end credit plan”). CreditBox does not dispute that the loan defined 

by the agreement here is a closed-end loan as that term is used in the federal guidance.

18

 For the sake of accuracy we note that Weathers argues that 59 days passed, but that the 

correct calculation is 60 days—from his alleged date of first default, July 24, to the alleged date of 

charge off, September 22. But this one-day difference does not affect our analysis on this issue.
No. 2022AP746

22

¶47 We conclude that the charge-off allegations fail to state a claim for a 

violation of CreditBox’s obligations of good faith either in its performance or 

enforcement of the loan agreement or the EFT authorization form, or in CreditBox’s 

performance or enforcement of duties under WIS. STAT. § 421.108. They could not 

support a claim that CreditBox lacked an honest intention to avoid unfair advantage 

or that its conduct could have violated “reasonable commercial standards of fair 

dealing.” To the extent that they may be based more generally on failures of 

CreditBox to communicate sufficiently with Weathers about the loan and 

outstanding debts before filing suit against Weathers, they could relate to the notice 

of right to cure allegations discussed in the next subsection. But we do not discern 

a basis for a claim specifically related to communication regarding the charge-off 

decision.

¶48 We begin with the loan agreement and the EFT authorization form. 

Based on these documents, we do not discern that the allegations in the counterclaim 

suggest a lack of honesty in fact or lack of observance of reasonable commercial 

standards of fair dealing, even construing every reasonable inference in Weathers’ 

favor. Nothing in these documents required CreditBox to wait more than 60 days 

after the first failure to make a payment before charging off the debt. Nor did these 

documents require that, instead of or before charging off the debt, CreditBox had to 

continue to attempt to generate EFT payments more than 60 days after the last 

unsuccessful attempt. We search the counterclaim in vain for a suggestion of 

subterfuges, evasions, or other opportunistic behavior by CreditBox related to the 

charge-off decision.

¶49 Weathers’ heavy reliance on the federal guidance, which to repeat is 

not referenced in his counterclaim, is misplaced. In Weathers’ own words, this 

guidance gives creditors “up to 120 days to charge off a bad debt”—which is a “not 
No. 2022AP746

23

later than” concept, as opposed to a “not earlier than” concept. Further, he does not 

argue that the guidance purports to establish a minimum time period that a creditor 

must wait before charging off a debt. 

¶50 Putting to the side the federal guidance, the counterclaim itself does 

not suggest a relevant objective standard that a factfinder could use to determine 

that CreditBox failed in its obligation of good faith by charging off the debt on day 

60, as opposed to on day 75 or day 120. Weathers now asks us to deem 60 days as 

acting “rather rapidly,” but he provides an insufficient basis to think, given the 

counterclaim allegations, that 60 days fell outside what is allowed under reasonable 

commercial standards of fair dealing. 

¶51 It is the same with the allegations of failures to communicate more, or 

perhaps to communicate differently, with Weathers specifically about the charge 

off. For example, the counterclaim does not allege that CreditBox representatives 

ignored communications that Weathers initiated with CreditBox regarding the 

charge off or that representatives were evasive or inaccurate in responding to 

communication from him on that topic. The counterclaim alleges that CreditBox’s 

“conduct as alleged herein demonstrates that plaintiff did not act in good faith with 

respect to its collection of this debt,” but this is merely a legal conclusion, which we 

are required to ignore. See Data Key Partners, 356 Wis. 2d 665, ¶19. 

¶52 Turning to the requirements of the Act, as CreditBox points out, 

Weathers does not argue that any provision in the Act required CreditBox to delay 

a charge off beyond 60 days or to communicate with Weathers more or in a different 

manner, and Weathers concedes the point by failing to reply to it. 

¶53 At oral argument, Weathers argued that the failure of CreditBox to 

communicate with him more than it did, “especially after [CreditBox] charged off 
No. 2022AP746

24

the debt early, can be seen as a misrepresentation by omission”—that is, stated in 

the terms of WIS. STAT. § 421.108, it could be seen as a failure of “honesty in fact 

in the conduct or transaction concerned.” We disagree. We do not discern in the 

allegations about CreditBox’s communication or lack of communication regarding 

the charge off a basis to allege a dishonest intention to create an unfair advantage. 

See Foseid, 197 Wis. 2d at 793 n.14. The counterclaim alleges that a CreditBox 

representative left Weathers “a phone call and voicemail message” about one week 

before the alleged charge off.19 Assuming without deciding that it could state a 

claim based on a dishonest intention to gain an unfair advantage for a creditor in the 

circumstances alleged here to charge off the debt without first making some attempt 

to contact the debtor about a possible charge off based on an alleged default, the 

counterclaim provides no basis to infer a dishonest intention in not contacting him 

more than is alleged (through the one voicemail) or in not contacting him in a 

different manner regarding the charge off. The counterclaim also alleges that, after 

the charge off, CreditBox made “little to no effort to notify Weathers that it believed 

he was in default or that payment of any amounts were still required,” but we fail to 

see how this could support a claim of dishonesty regarding the charge-off decision. 

In terms of the Foseid “honesty in fact” formulation, Weathers fails to explain how 

the counterclaim states a claim that CreditBox failed to “provide information or to 

give notice” about the charge off in a way that “render[s] the transaction unfair.” 

See id. 

¶54 In sum, as with the EFT withdrawal allegations, the charge-off 

allegations do not support a good faith claim. In both instances, Weathers rests 

 

19

 The wording in the counterclaim is ambiguous, but in Weathers’ favor we interpret this 

to mean that there was a single telephone call that resulted in a single voicemail message notifying 

him that CreditBox was contemplating a charge off as a result of default.
No. 2022AP746

25

heavily on the assertion of legal conclusions, which is not sufficient. See Data Key 

Partners, 356 Wis. 2d 665, ¶19. 

The Notice of Right to Cure Allegations

¶55 Weathers’ notice of right to cure allegations rest on counterclaim 

allegations already summarized above, along with the following additional 

allegation. CreditBox never gave Weathers “a statutorily-compliant notice of any 

asserted default” or “a chance to cure said default” before it filed its small claims 

action against him. 

¶56 In addition, Weathers now points to the fact that, in the loan 

agreement, CreditBox appeared to obligate itself to provide a notice of right to cure 

default before accelerating the debt, referring to Weathers as “you”: 

In the event of default and, if you have the right to cure the 

default pursuant to sec. 425.105, WIS. STATS., you fail to 

cure the default within 15 days after you are given notice of 

the default, the lender may declare the whole outstanding 

balance due under this agreement payable at once and 

proceed to collect it, including commencing legal action.

¶57 As we now explain further, the notice of right to cure allegations are 

based in part on WIS. STAT. §§ 425.104 and 425.105(1), with CreditBox countering 

based almost entirely on the reasoning in Security Finance v. Kirsch, 2019 WI 42, 

386 Wis. 2d 388, 926 N.W.2d 167, which we address below.

¶58 Under pertinent language in WIS. STAT. § 425.105(1), “[a] merchant 

may not accelerate the maturity of a consumer credit transaction” or “commence 

any action” “unless the merchant believes the customer to be in default ..., and then 

only upon the expiration of 15 days after a notice is given pursuant to [WIS. STAT.
No. 2022AP746

26

§] 425.104 if the customer has the right to cure under this section.” Section 425.104 

provides: 

(1) A merchant who believes that a customer is in 

default may give the customer written notice of the alleged 

default and, if applicable, of the customer’s right to cure any 

such default ([§] 425.105).

(2) Any notice given under this section shall contain 

the name, address and telephone number of the creditor, a 

brief identification of the consumer credit transaction, a 

statement of the nature of the alleged default and a clear 

statement of the total payment, including an itemization of 

any delinquency charges, or other performance necessary to 

cure the alleged default, the exact date by which the amount 

must be paid or performance tendered and the name, address 

and telephone number of the person to whom any payment 

must be made, if other than the creditor.

¶59 Weathers argues that the notice of right to cure allegations state a good 

faith claim in part because, if the allegations are true, CreditBox both breached the 

loan agreement and violated the Act, specifically WIS. STAT. § 425.105(1), when it 

allegedly accelerated the debt and commenced its action against him without giving 

him the 15-day notice described in WIS. STAT. § 425.104. CreditBox does not 

dispute that these allegations state a violation of § 425.105(1). 

¶60 Turning to Kirsch, our supreme court there emphasized that it was 

addressing a single question related in part to statutory provisions not at issue here, 

namely WIS. STAT. § 427.104(1)(g) and (1)(j). Section 427.104(1)(g) and (j) 

respectively define the following as “prohibited practices” under the Act: a creditor 

“[c]ommunicate[s] with the customer ... in such a manner as can reasonably be 

expected to threaten or harass the customer”; a creditor makes a “[c]laim, or 

attempt[s] or threaten[s] to enforce a right with knowledge or reason to know that 

the right does not exist.” Specifically, the court in Kirsch answered one question: 

Could a creditor’s failure to comply with the notice of default and right to cure 
No. 2022AP746

27

provisions of WIS. STAT. ch. 425, prior to commencing a collections action, 

constitute violations of § 427.104(1)(g) and (1)(j)? Kirsch, 386 Wis. 2d 388, ¶¶11, 

18-19.

¶61 The Kirsch court answered this question in the negative: Such a 

failure to comply with the notice and right to cure requirements as a prerequisite to 

commencing a collections action could not constitute violations of either of these 

WIS. STAT. § 427.104 subparts. Kirsch, 386 Wis. 2d 388, ¶19. More specifically, 

the court reasoned that, because a creditor’s failure to provide notice of default and 

right to cure is a mere “procedural” failing, it could not be a “prohibited practice” 

under the definitions in § 427.104, and therefore the debtor’s counterclaim citing 

§ 427.104(1)(g) and (1)(j) must be dismissed. Kirsch, 386 Wis. 2d 388, ¶19. The 

court rejected what it characterized as the debtor’s attempt to “shoehorn [the 

creditor’s] failure to comply with ch. 425 into a [WIS. STAT.] ch. 427 violation in 

order to recover the significant remedies and penalties ch. 427 imposes.” Kirsch, 

386 Wis. 2d 388, ¶19. A creditor’s failure to comply with this procedural 

requirement “did not disrupt [the creditor’s] right to payment,” and therefore, 

“[w]hile [the debtor] was entitled to dismissal of [the creditor’s] action [without 

prejudice,] ... [the debtor’s] counterclaims fail[ed] to state a claim for additional 

relief under § 427.104(1)(j)” or (1)(g). Kirsch, 386 Wis. 2d 388, ¶30.

¶62 CreditBox argues that, based on the reasoning in Kirsch, this aspect 

of Weathers’ counterclaim based on WIS. STAT. § 421.108 must be dismissed 

because the alleged failure of CreditBox to give him this notice would have been, 

in the words of the court in Kirsch, “merely a failure to comply with a procedural 

requirement that warranted dismissal of” the creditor’s action against the debtor, as 

opposed to constituting a substantive violation of the Act. See Kirsch, 386 Wis. 2d 

388, ¶30. That is, CreditBox essentially argues that, while § 421.108 generally 
No. 2022AP746

28

imposes the obligation of good faith on the performance or enforcement of duties 

that are defined in the Act, under the reasoning in Kirsch the particular duties 

defined in WIS. STAT. §§ 425.104 and 425.105(1) must fall outside the ambit of the 

good faith doctrine. We disagree.

¶63 CreditBox asks us to extend Kirsch from the context of the Act’s 

“prohibited practices” in debt collection to the context of the Act’s obligation of 

good faith, despite the explicit caution of the supreme court that it intended to “cabin 

[its] analysis” to the specific issue raised in that appeal. See Kirsch, 386 Wis. 2d 

388, ¶11. In the pertinent discussion, the court explicitly limited its attention to the 

reach of WIS. STAT. ch. 427—specifically, whether a debtor could have a remedy 

under WIS. STAT. § 427.105—and made no statements about the meaning of WIS.

STAT. § 421.108. 

¶64 Further, even putting to the side the court’s caution that its opinion is 

narrow in scope, the reasoning in Kirsch does not dictate that no consumer action 

for a violation of WIS. STAT. § 421.108 could be based on allegations involving a 

lender’s failure to provide notice of default and a right to cure. Specifically, the 

court had no occasion to consider whether a debtor could prove that a creditor’s 

decision to accelerate a loan and then file a claim in a manner that violates the Act—

together with all other relevant facts that might be produced in discovery that could 

support a claim of bad faith—violates § 421.108 because, according to the debtor, 

the creditor’s conduct was motivated by a dishonest intent to obtain an unfair 

advantage or could violate reasonable commercial standards of fair dealing.

¶65 It is true that Kirsch explains that a debtor is entitled to have a 

creditor’s claim dismissed without prejudice based on the creditor’s failure to 

provide the required notice of default and right to cure before commencing its action 
No. 2022AP746

29

against the debtor. See Kirsch, 386 Wis. 2d 388, ¶18. Given this, an initial 

impression might be that creditors lack an incentive to violate the Act in this manner. 

But, as Weathers points out, a creditor’s claim will be dismissed in these 

circumstances only if the debtor knows enough to move for dismissal on this 

ground. As the facts alleged here suggest, when not represented by counsel a debtor 

such as Weathers may frequently not know enough to move for dismissal on this 

ground. 

¶66 CreditBox’s argument in its briefing on this issue is entirely limited

to its reliance on Kirsch, offering no additional reason for dismissal of the notice of 

right to cure allegations. 

¶67 At oral argument, CreditBox attempted to suggest an additional basis 

for dismissal of the notice of right to cure allegations. This additional argument is 

based on the statement in Hauer v. Union State Bank of Wautoma, 192 Wis. 2d 

576, 532 N.W.2d 456 (Ct. App. 1995), that WIS. STAT. § 401.203 of the uniform 

commercial code in Wisconsin “does not support an independent cause of action for 

failure to act in good faith under a contract.” See Hauer, 192 Wis. 2d at 597 & n.7 

(citing commentary to the code). CreditBox’s argument appears to be that, under 

the reasoning in Hauer and Kirsch, when the allegation is that a creditor violated a 

specific provision of the Act, then a debtor’s remedies must be limited to those 

which the Act provides for violation of that specific provision, and the violation 

cannot be part of an independent claim under WIS. STAT. § 421.108. We cannot 

discern such a rule in Hauer and Kirsch. Further, this would insert limiting 

language into § 421.108 that does not appear there and it would also contradict the 

meaning of the second sentence of § 421.108 explained above. 
No. 2022AP746

30

¶68 Having rejected CreditBox’s limited arguments on this issue, we 

conclude that Weathers’ notice of right to cure allegations cannot be dismissed at 

this stage in the proceedings because the counterclaim allows for at least one 

reasonable set of inferences to the following effect: CreditBox violated the Act’s 

notice and right to cure requirement as part of a dishonest attempt to gain an unfair 

advantage over Weathers and violated reasonable commercial standards of fair 

dealing by intentionally and unfairly depriving him of his lawful opportunity to 

attempt to stave off acceleration and a meritorious lawsuit against him. Whether 

the facts that the parties here could adduce in discovery, to the extent permitted by 

the circuit court following remand, would require expert opinion in order to survive 

a possible motion for summary judgment by CreditBox is among the potential issues 

that would have to be presented to the court following remand if developed by the 

parties. What is important for present purposes is that, based on all inferences 

arising from the counterclaim, it is not difficult to infer potential testimony on these 

topics that could support a good faith claim, whether coming from an expert or other 

sources. 

II. Weathers’ Unconscionability Counterclaim Under WIS. STAT.

§ 425.107 

¶69 Weathers alleges that the totality of the conduct by CreditBox, 

including the same allegations underlying the EFT withdrawal, charge off, and 

notice of right to cure allegations described above, was unconscionable in violation 

of WIS. STAT. § 425.107. CreditBox argues that we should affirm the dismissal of 

this counterclaim based heavily on its interpretation of Duncan. CreditBox does 

not argue that the unconscionability counterclaim is defective in some other way. 

Duncan stated that a consumer may bring such a claim “only in response to ‘actions 

or other proceedings brought by a creditor to enforce rights arising from consumer 
No. 2022AP746

31

credit transactions.’” See Duncan, 400 Wis. 2d 1, ¶28 (quoting WIS. STAT.

§ 425.102). The circuit court also relied exclusively on Duncan in granting the 

motion to dismiss this counterclaim. We conclude that Duncan does not apply to 

the facts here and we reject the related arguments made by CreditBox on this issue. 

In short, CreditBox triggered the potential for the counterclaim by filing suit against 

Weathers and therefore § 425.102 is not a bar to this counterclaim. Duncan does 

not dictate or suggest a different result on these facts.

¶70 WISCONSIN STAT. § 425.107(1) provides:

With respect to a consumer credit transaction, if the 

court as a matter of law finds that any aspect of the 

transaction, any conduct directed against the customer by a 

party to the transaction, or any result of the transaction is 

unconscionable, the court shall, in addition to the remedy 

and penalty authorized in sub. (5), either refuse to enforce 

the transaction against the customer, or so limit the 

application of any unconscionable aspect or conduct to avoid 

any unconscionable result.[20]

¶71 While we do not have occasion to address the substance of an 

unconscionability claim under the Act, or the specifics of Weathers’ 

unconscionability allegations here, we note for context that WIS. STAT. § 425.107 

lists nine factors as being pertinent to determining unconscionability, including 

these varied sources: “[d]efinitions of unconscionability in statutes, regulations, 

 

20

 Regarding the reference to “the remedy and penalty authorized in” WIS. STAT.

§ 425.107(5), that subsection provides:

In addition to the protections afforded in sub. (1), the 

customer shall be entitled upon a finding of unconscionability to 

recover from the creditor or the person responsible for the 

unconscionable conduct a remedy and penalty in accordance with 

[WIS. STAT. §] 425.303.

Section 425.303 provides for a fine of $100 and the “actual damages, including any incidental and 

consequential damages, sustained by the customer by reason of the violation.”
No. 2022AP746

32

rulings and decisions of legislative, administrative or judicial bodies.” See

§ 425.107(3)(i).

¶72 At issue in Duncan is the statement of scope for subchapter I 

(“Creditors’ remedies”), within WIS. STAT. ch. 425 (“Consumer transactions –

remedies and penalties”). Subchapter I contains the unconscionability statute, WIS.

STAT. § 425.107. The scope statement provides:

[Subchapter I] applies to actions or other proceedings 

brought by a creditor to enforce rights arising from consumer 

credit transactions and to extortionate extensions of credit 

under [WIS. STAT. §] 425.108.

WIS. STAT. § 425.102.

¶73 Interpreting the scope statement, our supreme court determined in 

Duncan that the plaintiff could not bring an unconscionability claim under WIS.

STAT. § 425.107 because the plaintiff brought it in a separate lawsuit, and not “in 

response to ‘actions or other proceedings brought by a creditor.’” Duncan, 400 

Wis. 2d 1, ¶27 (quoting WIS. STAT. § 425.102). The court also determined that it 

did not change the result that the plaintiff brought the claim in response to a nonjudicial repossession by the creditor under WIS. STAT. § 425.206(1)(d). Duncan, 

400 Wis. 2d 1, ¶29. While this creditor conduct was adverse to the debtor, it was 

“not one of the ‘actions or other proceedings brought by a creditor’ contemplated 

by” § 425.102. Id.

¶74 We conclude that Duncan’s interpretation of WIS. STAT. § 425.102 

does not address the circumstances here. We further conclude that, under the most 

reasonable interpretation of § 425.102, the fact that CreditBox moved for voluntary 

dismissal of its claim before Weathers brought his unconscionability counterclaim 

does not prevent Weathers from pursuing it. Weathers brought the counterclaim “in 
No. 2022AP746

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response to” what was, in the terms of § 425.102, CreditBox’s “action[]” brought 

“to enforce” its rights, even though CreditBox had already filed its motion for 

voluntary dismissal under WIS. STAT. § 805.04(1) or (2). Thus, unlike the nonjudicial repossession context in Duncan, Weathers’ counterclaim was brought in 

response to an action against him filed by CreditBox. 

¶75 The court in Duncan explained that a plaintiff may not seek to enforce 

WIS. STAT. § 425.107 “‘via a separate civil lawsuit,’” Duncan, 400 Wis. 2d 1, ¶26 

(quoting Riel v. Navient Sols., Inc., No. 16-CV-1191-JPS, 2017 WL 168900, *3 

(E.D. Wis. Jan. 17, 2017)), because such an enforcement is in the nature of “a 

defense to contract enforcement, not an affirmative claim available outside a 

contract-enforcement or breach-of-contract action,” id., ¶27. In this case, however, 

Weathers did not bring his unconscionability counterclaim in a “separate civil 

lawsuit” or “outside a contract-enforcement or breach-of-contract action.” He 

brought it after CreditBox sued him on the loan agreement. If Weathers had sought 

to enforce the unconscionability provision against CreditBox in a separate lawsuit, 

as the plaintiff did in Duncan, dismissal would be appropriate. See id., ¶2. Instead, 

in the words of Duncan, he brought the counterclaim “in response to [an] ‘action[] 

... brought by a creditor.’” Id., ¶27 (quoting WIS. STAT. § 425.102). 

¶76 As Weathers points out, our supreme court did not determine in 

Duncan that the rights conferred on debtors by WIS. STAT. § 425.107 are precisely

coextensive with common law unconscionability, nor did it define those rights as 

being exclusively an affirmative defense. Instead the court observed, in support of 

its determination that the plaintiff in that case could not pursue the claim in a 

plaintiff-initiated lawsuit, that the specific limitations in the scope statement in WIS.

STAT. § 425.102 “are in line with the common law doctrine of unconscionability, 

which is a defense to contract enforcement, not an affirmative claim available 
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outside a contract-enforcement or breach-of-contract action.” Duncan, 400 Wis. 2d 

1, ¶27 (citing Rosecky v. Schissel, 2013 WI 66, ¶57, 349 Wis. 2d 84, 833 N.W.2d 

634, which identifies common law unconscionability as a “defense”). As Weathers 

points out, WIS. STAT. ch. 425 contains options for relief that are not strictly 

defensive in nature, which signals a legislative intent in creating § 425.107 that 

differs from a mere duplication of the common law defensive doctrine. See WIS.

STAT. §§ 425.107, 425.303. 

¶77 Further, our application of WIS. STAT. § 425.102 to these particular 

counterclaim allegations is consistent with the Act’s rules of construction, 

referenced supra ¶22. As Weathers contends, a contrary ruling would effectively 

allow a creditor to decide whether a counterclaim alleging that it had committed 

unconscionable conduct under WIS. STAT. § 425.107 may be pursued against it. 

Notably, a creditor could obtain voluntary dismissal of a claim whenever a debtor 

retains counsel or the creditor suspects that the debtor has some personal 

understanding of the debtor’s legal rights, perhaps including proof of actionable 

unconscionable conduct by the creditor. This is an easily foreseeable scenario. 

Thus, the construction urged by CreditBox is not one designed to promote the 

protection of customers from unfair practices, see WIS. STAT. § 421.102(2)(b), (c), 

and would significantly limit the practical utility of § 425.107.

¶78 It is true that, under some circumstances, a creditor could unilaterally 

obtain voluntary dismissal under WIS. STAT. § 805.04(1), and CreditBox argues that 

this occurred here. See § 805.04(1) (allowing dismissal of action by plaintiff 

“without order of court”). But we do not see how that could reasonably affect the 

application of WIS. STAT. § 425.107. Even when a creditor unilaterally obtains 

voluntary dismissal of its suit against a debtor, the creditor’s conduct in filing suit 

triggers the availability of counterclaims; in that case, the voluntary dismissal does 
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not alter the fact that the creditor brought an “action[]” “to enforce rights arising 

from [a] consumer credit transaction[].” 

¶79 CreditBox defends its interpretations of WIS. STAT. § 425.107 and 

Duncan in part based on the premise that a debtor claiming unconscionability would 

still have available remedies against a creditor under the federal Fair Credit 

Reporting Act, 15 U.S.C. § 1681 et seq., as well as potential state law claims of 

abuse of process and common law remedies. But, assuming without deciding the 

availability of such alternative remedies to someone in Weathers’ shoes, that does 

not change the fact that under CreditBox’s interpretation the ability for a debtor to 

obtain relief under § 425.107 would be essentially under the control of creditors. 

Further, CreditBox does not direct us to language in § 425.107 or a closely related 

statute that reflects an intent to limit the exercise of consumer rights under the Act 

to only those situations in which other remedies may not be available. 

¶80 CreditBox emphasizes that, as summarized above, it filed its motion 

for voluntary dismissal before Weathers brought his counterclaims, and therefore 

the motion for voluntary dismissal was not, in the words of Duncan, “a direct 

response to” the counterclaims. This amounts to an argument that, under WIS. STAT.

§ 425.102, the timing of the filing of a creditor’s motion for voluntary dismissal 

dictates whether a counterclaim is made “in response to” an action filed by a 

creditor. We see no basis for this interpretation. Instead, we conclude that the only 

reasonable interpretation of § 425.102 is that all counterclaims made by debtors in 

actions brought by creditors are “in response to” those actions. Further, this 

interpretation is not inconsistent with any statement of our supreme court in 

Duncan, including its observation that the scope limitations in § 425.102 generally 

align with the defense-oriented common law doctrine. 
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¶81 CreditBox asserts that the unconscionability counterclaim here is “an 

independent, stand-alone claim.” This assertion ignores the fact that the 

counterclaim was brought in the same action that CreditBox initiated against 

Weathers—indeed, after discovery in the action was initiated. To repeat, CreditBox 

sought a remedy in court that constituted an “action” “to enforce” its “rights arising 

from [a] consumer credit transaction[],” in response to which Weathers filed his 

counterclaims. See Duncan, 400 Wis. 2d 1, ¶28 (quoting WIS. STAT. § 425.102).21

¶82 CreditBox does not develop additional arguments to support 

affirmance of the circuit court’s decision to grant its motion to dismiss the 

unconscionability counterclaim, beyond those arguments already addressed, and we 

resolve this motion to dismiss issue based on our rejection of those specific 

arguments. 

CONCLUSION

¶83 For all of these reasons, we affirm the circuit court’s decision to grant 

CreditBox’s motion for voluntary dismissal, reverse its decision to grant 

CreditBox’s motion to dismiss Weathers’ good faith counterclaim, and reverse its 

decision to grant CreditBox’s motion to dismiss Weathers’ unconscionability 

counterclaim.

By the Court.—Order affirmed in part; reversed in part and cause 

remanded.

 

21

 CreditBox cites a non-precedential but potentially persuasive opinion of this court 

addressing circumstances similar in some respects to those in this case. See Security Fin. v. Kirsch, 

No. 2017AP1408, unpublished slip op. (WI App Apr. 11, 2018). That opinion resolved the issue 

in a single, conclusory paragraph that we do not consider persuasive.