2023 WI 19

SUPREME COURT OF WISCONSIN

CASE NO.: 2019AP1728 & 2019AP2063

COMPLETE TITLE: In re: 

The Atrium of Racine, Inc., d/b/a The Atrium and 

Bay Pointe:

Marilyn Casanova , member of Creditor Committee, 

Audrey J. Fox, member of Creditor Committee, Dr. 

Melvin Miritz, member of Creditor Committee, 

Linda Miritz, member of Creditor Committee, 

Edward and Louise Langleib Trust, member of 

Creditor Committee, Carleton Musson, member of 

Creditor Committee, Wilma Milovancevic, member 

of Creditor Committee, Helen Taylor, member of 

Creditor Committee, Louis P. Teicheret Trust, 

member of Creditor Committee, Reverend Frederick 

Marks, member of Creditor Committee, Jewel 

Marks, member of Creditor Committee, Patricia 

Meier, member of Creditor Committee, Patricia 

Teernstra, member of Creditor Committee, Andrew 

Mikaelian, member of Creditor Committee, 

Marcella Mikaelian, member of Creditor 

Committee, Josephine Brooks, member of Creditor 

Committee, Evelyn Odell, member of Creditor 

Committee, Laurence Freer, member of Creditor 

Committee, Dorothy Kohl, member of Creditor 

Committee, Karen Boerger, member of Creditor 

Committee, Jacqueline Williamson, member of 

Creditor Committee, Judy Glowinski, member of 

Creditor Committee, Anne Tredwell, member of 

Creditor Committee, Marilyn Baham, member of 

Creditor Committee, Elsie Gotzman, member of 

Creditor Committee, Lucille Ciaramita, member of 

Creditor Committee, Joanne Ramaker, member of 

Creditor Committee, Johanna Sander, member of 

Creditor Committee, Thomas Eser, member of 

Creditor Committee, Henryetta Eser, member of 

Creditor Committee, Grace Nelson, member of 

Creditor Committee, Jane Odders, member of 

Creditor Committee, David Nelson, member of 

Creditor Committee, Ray Katt (deceased), member 

of Creditor Committee, Louise Katt, member of 

Creditor Committee, Ethel Hader, member of 

Creditor Committee, Warren Larsen, member of 

Creditor Committee, Ellen Larsen, member of 

Creditor Committee, Frances Scott, member of 
2

Creditor Committee, Susan Prouty, member of 

Creditor Committee, Robert Rainey, member of 

Creditor Committee, Patricia Rainey, member of 

Creditor Committee, Helen Eckheart, member of 

Creditor Committee, Wilma Wise, member of 

Creditor Committee, Earl Christianson, member 

of Creditor Committee and Marian Bloch, member 

of Creditor Committee,

 Appellants,

Var Krikorian, Ruth Minton, Richard Minton, 

Walter Steidl, Irene Miller, Marian Kornwolf, 

Marjorie Speckhard, Delores Torphy, Geraldine 

Baumblatt, Joan Peterson, John Rowland, 

Julianne Rowland, Lorraine Pavelcik, Marilyn 

Iselin, Metta Reiker, Prudence White, Elaine 

Oetlinger, Esther Wulff, Helen Veenstra, Rev. 

Dr. Ross Henry Larson, Fred and Nancy Flofer, 

Winifried Wiser, Nazaly Bagdasian, Robert 

Callaway, Estate of Elaine Zlevor, Marshall 

Cushman, Bernard Braun, Patricia Braun, Bob 

Ottum, Holly Ottum, Joyce Ottum, Jeanne Haas, 

Gloria Murphy, Ralph Anderson, Doris Beuttler, 

Genevieve Hostak, Marlene Weichmann, Mary 

Mueller, Wood Family Trust and Mary Holtz,

 Claimants-Appellants,

 v.

Michael S. Polsky, Esq. , Receiver and The Bank 

of New York Mellon Trust Company, N.A.,

 Respondents-Petitioners.

In re: 

The Atrium of Racine, Inc., d/b/a The Atrium and 

Bay Pointe:

Marilyn Casanova, member of Creditor Committee, 

Audrey J. Fox, member of Creditor Committee, 

Dr. Melvin Miritz, member of Creditor Committee, 

Linda Miritz, member of Creditor Committee, 

Edward and Louise Langleib Trust, member of 

Creditor Committee, Carleton Musson, member of 

Creditor Committee, Wilma Milovancevic, member 

of Creditor Committee, Helen Taylor, member of 

Creditor Committee, Louis P. Teichert Trust, 

member of Creditor Committee, Reverend Frederick 

Marks, member of Creditor Committee, Jewel 

Marks, member of Creditor Committee, Patricia 

Meier, member of Creditor Committee, Patricia 

Teernstra, member of Creditor Committee, Andrew 

Mikaelian, member of Creditor Committee, 
3

Marcella Mikaelian, member of Creditor 

Committee, Josephine Brooks, member of Creditor 

Committee, Evelyn Odell, member of Creditor 

Committee, Laurence Freer, member of Creditor 

Committee, Dorothy Kohl, member of Creditor

Committee, Karen Boerger, member of Creditor 

Committee, Jacqueline Williamson, member of 

Creditor Committee, Judy Glowinski, member of 

Creditor Committee, Anne Tredwell, member of 

Creditor Committee, Marilyn Baham, member of 

Creditor Committee, Elsie Gotzman, member of 

Creditor Committee, Lucille Ciaramita, member of 

Creditor Committee, Joanne Ramaker, member of 

Creditor Committee, Johanna Sander, member of 

Creditor Committee, 

Thomas Eser, member of Creditor Committee, 

Henryetta Eser, member of Creditor Committee, 

Grace Nelson, member of Creditor Committee, 

Jane Odders, member of Creditor Committee, 

David Nelson, member of Creditor Committee, 

Ray Katt (deceased), member of Creditor 

Committee, Louise Katt, member of Creditor 

Committee, Ethel Hader, member of Creditor 

Committee, Warren Larsen, member of Creditor 

Committee,Ellen Larsen, member of Creditor 

Committee, Frances Scott, member of Creditor 

Committee, Susan Prouty, member of Creditor 

Committee, Robert Rainey, member of Creditor 

Committee, Patricia Rainey, member of Creditor 

Committee, Helen Eckheart, member of Creditor 

Committee, Wilma Wiser, member of Creditor 

Committee, Earl Christianson, member of Creditor 

Committee, Marian Bloch, member of Creditor 

Committee, Jan Teichert, member of Creditor 

Committee, Dorothy Nelson, member of Creditor 

Committee, Metta Reiker, member of Creditor 

Committee, Prudence White, member of Creditor 

Committee, Elaine Oetlinger, member of Creditor 

Committee, Esther Wulff, member of Creditor 

Committee, Helen Veenstra, member of Creditor 

Committee, Mark H. Larson, Successor Trustee of 

the Ross H. Larson and Willetta J. Larson 

Revocable Trust of 2015, member of Creditor 

Committee, Fred Hofer, member of Creditor 

Committee, Nancy Hofer, member of Creditor 

Committee, Winifred Wiser, member of Creditor 

Committee, Nazaly Bagdasian, member of Creditor 

Committee, Robert Callaway, member of Creditor 

Committee, Estate of Elaine Zlevor, member of 

Creditor Committee, Marshall Cushman, member of 
4

Creditor Committee, Var Krikorian, member of 

Creditor Committee, Ruth Minton, member of 

Creditor Committee, Richard Minton, member of 

Creditor Committee, Walter Steidl, member of 

Creditor Committee, Irene Miller, member of 

Creditor Committee, Marian Kornwolf, member of 

Creditor Committee, Marjorie Speckhard, member 

of Creditor Committee, Delores Torphy, member of 

Creditor Committee, Geraldine Baumblatt, member 

of Creditor Committee, Joan Peterson, member of 

Creditor Committee, John Rowland, member of 

Creditor Committee, Julianne Rowland, member of

Creditor Committee, Lorraine Pavelcik, member of 

Creditor Committee, Marilyn Iselin, member of 

Creditor Committee, Bernard Braun, member of 

Creditor Committee, Patricia Braun, member of 

Creditor Committee, Bob Ottum, member of 

Creditor Committee, Holly Ottum, member of 

Creditor Committee, Joyce Ottum, member of 

Creditor Committee, Jeanne Haas, member of 

Creditor Committee, Gloria Murphy, member of 

Creditor Committee, Ralph Anderson, member of 

Creditor Committee, Doris Beuttler, member of 

Creditor Committee, Genevieve Hostak, member of 

Creditor Committee, Marlene Weichmann, member of 

Creditor Committee, Mary Mueller, member of 

Creditor Committee, Wood Family Trust, member of 

Creditor Committee and Mary Holtz, member of 

Creditor Committee,

 Appellants,

 v.

Michael S. Polsky, Esq., Receiver and The Bank 

of New York Mellon Trust Company, N.A.,

 Respondents-Petitioners.

REVIEW OF DECISION OF THE COURT OF APPEALS 

Reported at 399 Wis. 2d 322, 964 N.W.2d 544

(2021 – unpublished)

OPINION FILED: March 16, 2023 

SUBMITTED ON BRIEFS: 

ORAL ARGUMENT: September 9, 2022 

SOURCE OF APPEAL:

COURT: Circuit 

COUNTY: Racine 

JUDGE: Michael J. Piontek and David W. Paulson 
5

JUSTICES:

REBECCA GRASSL BRADLEY, J., delivered the majority opinion for a 

unanimous Court.

NOT PARTICIPATING:

 

ATTORNEYS:

For the respondents-petitioners, there were briefs filed by 

Katherine Stadler, Carla O. Andres, Michael S. Polsky, and 

Godfrey & Kahn, S.C., Madison, and Beck, Chaet, Bamberger & 

Polsky, S.C., Milwaukee. There was an oral argument by Katherine 

Stadler and Joseph M. Peltz. 

For the plaintiffs-appellants, there was a brief filed by 

John A. Becker and Becker & French, Racine. There was an oral 

argument by John A. Becker and Thomas M. Devine. 

An amicus curiae brief was filed by James E. Bartzen and 

Boardman & Clark LLP, Madison, for the Wisconsin Bankers 

Association.
2023 WI 19

NOTICE

This opinion is subject to further 

editing and modification. The final 

version will appear in the bound 

volume of the official reports. 

Nos. 2019AP1728 & 2019AP2063

(L.C. No. 2007CV1133)

STATE OF WISCONSIN : IN SUPREME COURT

In re: 

The Atrium of Racine, Inc., d/b/a The Atrium 

and Bay Pointe:

Marilyn Casanova, member of Creditor Committee, 

Audrey J. Fox, member of Creditor Committee, 

Dr. Melvin Miritz, member of Creditor 

Committee, Linda Miritz, member of Creditor 

Committee, Edward and Louise Langleib Trust, 

member of Creditor Committee, Carleton Musson, 

member of Creditor Committee, Wilma 

Milovancevic, member of Creditor Committee, 

Helen Taylor, member of Creditor Committee, 

Louis P. Teicheret Trust, member of Creditor 

Committee, Reverend Frederick Marks, member of 

Creditor Committee, Jewel Marks, member of 

Creditor Committee, Patricia Meier, member of 

Creditor Committee, Patricia Teernstra, member 

of Creditor Committee, Andrew Mikaelian, member 

of Creditor Committee, Marcella Mikaelian, 

member of Creditor Committee, Josephine Brooks, 

member of Creditor Committee, Evelyn Odell, 

member of Creditor Committee, Laurence Freer,

member of Creditor Committee, Dorothy Kohl, 

member of Creditor Committee, Karen Boerger, 

member of Creditor Committee, Jacqueline 

Williamson, member of Creditor Committee, Judy 

Glowinski, member of Creditor Committee, Anne

Tredwell, member of Creditor Committee, Marilyn 

Baham, member of Creditor Committee, Elsie 

Gotzman, member of Creditor Committee, Lucille 

Ciaramita, member of Creditor Committee, Joanne 

Ramaker, member of Creditor Committee, Johanna 

Sander, member of Creditor Committee, Thomas 

Eser, member of Creditor Committee, Henryetta 

Eser, member of Creditor Committee, Grace 

Nelson, member of Creditor Committee, Jane 

Odders, member of Creditor Committee, David 

Nelson, member of Creditor Committee, Ray Katt 

(deceased), member of Creditor Committee, 

Louise Katt, member of Creditor Committee, 

FILED

MAR 16, 2023

Sheila T. Reiff

Clerk of Supreme Court
1

Ethel Hader, member of Creditor Committee, 

Warren Larsen, member of Creditor Committee, 

Ellen Larsen, member of Creditor Committee, 

Frances Scott, member of Creditor Committee, 

Susan Prouty, member of Creditor Committee, 

Robert Rainey, member of Creditor Committee, 

Patricia Rainey, member of Creditor Committee, 

Helen Eckheart, member of Creditor Committee, 

Wilma Wiser, member of Creditor Committee, Earl 

Christianson, member of Creditor Committee and 

Marian Bloch, member of Creditor Committee,

 Appellants,

Var Krikorian, Ruth Minton, Richard Minton, 

Walter Steidl, Irene Miller, Marian Kornwolf, 

Marjorie Speckhard, Delores Torphy, Geraldine 

Baumblatt, Joan Peterson, John Rowland, 

Julianne Rowland, Lorraine Pavelcik, Marilyn 

Iselin, Metta Reiker, Prudence White, Elaine 

Oetlinger, Esther Wulff, Helen Veenstra, Rev. 

Dr. Ross Henry Larson, Fred and Nancy Flofer, 

Winifried Wiser, Nazaly Bagdasian, Robert 

Callaway, Estate of Elaine Zlevor, Marshall 

Cushman, Bernard Braun, Patricia Braun, Bob 

Ottum, Holly Ottum, Joyce Ottum, Jeanne Haas, 

Gloria Murphy, Ralph Anderson, Doris Beuttler, 

Genevieve Hostak, Marlene Weichmann, Mary 

Mueller, Wood Family Trust and Mary Holtz,

 Claimants-Appellants,

 v.

Michael S. Polsky, Esq. , Receiver and The Bank 

of New York Mellon Trust Company, N.A.,

 Respondents-Petitioners.

REBECCA GRASSL BRADLEY, J., delivered the majority opinion for a 

unanimous Court.

REVIEW of a decision of the Court of Appeals. Reversed. 

¶1 REBECCA GRASSL BRADLEY, J. After the Atrium, a 

senior-living facility, defaulted on debt service payments to a 
Nos. 2019AP1728 & 2019AP2063 

2

group of bondholders, the facility filed a petition for 

receivership.1 The court-appointed receiver sold the Atrium's 

assets, generating more than $4 million in proceeds. According 

to the receiver, the Atrium owed the bondholders more than $6 

million, secured by a valid mortgage lien on the Atrium's 

estate. Many of the Atrium's residents claimed they were 

entitled to the proceeds of the sale because, under their 

residency agreements, they were owed reimbursement of the 

entrance fees they paid to the Atrium. The circuit court 

concluded the bondholders' mortgage lien was superior to the 

residents' entrance fee claims.2 The court of appeals reversed, 

applying M&I First National Bank v. Episcopal Homes Management, 

Inc., 195 Wis. 2d 485, 536 N.W.2d 175 (Ct. App. 1995) to deem 

the residents' claims superior to the bondholders' lien.3

¶2 Before this court, the residents concede the 

bondholders possess a valid, perfected mortgage lien on the 

Atrium's estate, but the residents argue (1) the bondholders 

contracted away the superiority of their mortgage lien, and (2) 

 

1 A receivership is a sequestration of an insolvent estate's 

assets, and a receiver is an impartial manager of those assets. 

Admanco, Inc. v. 700 Stanton Drive, LLC, 2010 WI 76, ¶32, 326 

Wis. 2d 586, 786 N.W.2d 759; see also, BNP Paribas v. Olsen's 

Mill, Inc., 2011 WI 61, ¶101, 335 Wis. 2d 427, 799 N.W.2d 792 

(Roggensack, J., concurring).

2 Judge David W. Paulson, Racine County, presided. As 

proceedings continued, Judge Michael J. Piontek and later Judge 

Jon E. Frederickson rotated onto the case.

3 Casanova v. Polsky, Nos. 2019AP1728 & 2019AP2063, 

unpublished slip op. (Wis. Ct. App. July 30, 2021). 
Nos. 2019AP1728 & 2019AP2063 

3

Episcopal Homes grants entrance fee claims superiority. We 

disagree and hold: (1) Under Wis. Stat. § 128.17 (2021–22), the 

bondholders' mortgage lien is superior to the residents' 

contract claims;4 (2) the bondholders did not contract away the

superiority of their lien; and (3) Episcopal Homes does not 

apply to the proceeds from the sale of real property with a 

properly perfected mortgage lien. We therefore reverse the 

decision of the court of appeals.

I. BACKGROUND

A. Bay Pointe Project and Financing Documents

¶3 The Atrium of Racine, Inc. was a nonprofit corporation 

that owned and operated a 76-unit senior-living facility. In 

2002, the Atrium sought to build an assisted-living home called 

Bay Pointe. To finance the project, the Atrium contracted with 

the Elderly Housing Authority of the City of Racine (the 

Authority) to issue bonds. The Authority sold the bonds to Bank 

One Trust Company, National Association,5 trustee for a group of 

approximately 800 investors (the Bondholders' Trustee). To 

effectuate this transaction, various parties entered into a 

series of contracts: a Project Contract between the Atrium and 

the Authority; a Mortgage and Security Agreement (the Mortgage) 

between the Atrium and the Authority (which assigned its 

 

4 All subsequent references to the Wisconsin Statutes are to 

the 2021–22 version unless otherwise indicated.

5 Bank One is the predecessor in interest to New York Mellon 

Trust Company, N.A., which now serves as the Bondholders'

Trustee.
Nos. 2019AP1728 & 2019AP2063 

4

interest to the Bondholders' Trustee); and, between the 

Authority and the Bondholders' Trustee, a Trust Indenture 

(collectively, the Financing Documents). As required by 

securities regulations, the bond underwriter6 prepared an 

Official Statement summarizing the material terms and conditions 

of the bond issuance as well as the risks of investing. Because 

the Official Statement is not a contract, it was not signed by 

any party, nor was it incorporated by reference into any 

contract.

¶4 The Project Contract established the process by which 

the bonds would issue as well as the terms and conditions 

governing the Atrium's construction expenditures. Under its 

terms, the Authority would issue and sell revenue bonds, 

depositing the proceeds into a Project Fund from which the 

Atrium would draw to cover construction expenses.7 Under the 

Mortgage, the Atrium pledged its real estate, tangible personal 

property, revenue, and proceeds of the foregoing to the 

Authority as collateral for repayment of the bond proceeds.

 

6 A bond underwriter purchases bonds from an issuer and 

distributes those bonds to the public. Sec. Indus. Ass'n v. Bd. 

of Governors of Fed. Rsrv. Sys., 468 U.S. 207, 217 n.17 (1984). 

By purchasing and selling bonds on its own account, an 

underwriter assumes all risk of loss from the issuer. Id. at 

218 n.18.

7 The proceeds from the sale of the bonds were a loan from 

the Authority to the Atrium, for which the Atrium signed 

promissory notes documenting its duty to repay the Authority.
Nos. 2019AP1728 & 2019AP2063 

5

¶5 Bank One purchased $8,050,000 in Atrium bonds from the 

Authority under the Trust Indenture,8 which assigned to Bank One 

(as Bondholders' Trustee) the Authority's Mortgage lien on the 

Atrium's estate. After purchasing the bonds, Bank One perfected 

its security interest in the real estate by filing the Mortgage 

with the Racine County Register of Deeds. It also filed a UCC 

financing statement with the Wisconsin Department of Financial 

Institutions, which documented Bank One's security interest in 

the Atrium's assets and perfected its security interest in 

collateral other than real estate.9 No party disputes the 

bondholders possess a properly perfected mortgage lien on the 

Atrium's estate.

B. Residency Agreements

¶6 Before moving into the Atrium, each resident signed a 

residency agreement10 requiring the resident to pay an entrance 

 

8 A trust indenture is a "document containing the terms and 

conditions governing a trustee's conduct and the trust 

beneficiaries' rights." Trust indenture, Black's Law Dictionary

919 (11th ed. 2019).

9 The parties do not dispute that when New York Melon 

succeeded Bank One in interest, all necessary continuation, 

assignment, and name-change documents were filed with the State.

10 Over time, the Atrium altered the form, substance, and 

language of these agreements for new residents. The record 

contains six different versions of the agreement, but the 

differences among them do not affect our analysis.
Nos. 2019AP1728 & 2019AP2063 

6

fee ranging from $40,000 to $238,000.11 Collectively, Atrium 

residents had paid over $7.5 million in entrance fees at the 

time this suit started. Upon moving out of the Atrium, each 

resident's entrance fee would be partly refundable when a new 

resident moved into the Atrium and paid an entrance fee. To 

calculate a refund, the Atrium used one of two formulas 

depending on which version of the residency agreement the 

resident signed. The first formula provided for a flat 90% 

refund. The second formula used an "option ratio," under which 

the refund varied based on the value of the new resident's 

entrance fee. Once a new fee was paid, the Atrium used that 

money to refund the entrance fee paid by the former resident. 

Entrance fees were deposited in the Atrium's general operating 

account——commingled with the funds for day-to-day expenses——

rather than a segregated account.

C. Receivership

¶7 This suit arose when the Atrium defaulted on its debt 

service payments to the bondholders. Under Wis. Stat. ch. 128, 

the Atrium commenced a voluntary assignment for the benefit of 

 

11 Certain agreements required Atrium residents to pay a 

security deposit in addition to an entrance fee. In the 

conclusion section of their brief, the residents request we hold 

"the residents are entitled to reimbursement of their entrance 

fees and security deposits out of the proceeds of the sale of 

the Atrium before payment to the Bondholders." The residents do 

not, however, develop any argument regarding security deposits 

specifically; rather, the residents ask us to treat their 

entrance fees as security deposits under Episcopal Homes. As 

explained in this opinion, the bondholders' properly perfected 

mortgage lien has priority over the residents' claims with 

respect to the proceeds from the sale of real property.
Nos. 2019AP1728 & 2019AP2063 

7

creditors in the circuit court. The court appointed a receiver, 

vesting him with "all of the usual powers . . . pursuant to 

Chapter 128 of the Wisconsin Statutes[.]" The court 

specifically authorized the receiver "to sell any and all 

property of the [Atrium] free and clear of all liens, with all 

liens attaching to the proceeds of sale in the order of their 

priority, through public or private proceedings, in any 

commercially reasonable manner, subject to the prior approval of 

[the] Court."

¶8 The receiver notified the Atrium's creditors and other 

interested parties of his appointment and requested they file 

their verified claims with the circuit court. Residents 

individually filed proofs of claim for refund of entrance fees 

collectively totaling more than $7 million. One resident, Dr. 

Ross Henry Larson, moved for the creation of a resident 

committee under Wis. Stat. § 128.10. The circuit court granted 

Dr. Larson's motion but emphasized the narrow scope and limited 

duties of the committee:

The Court's already indicated that I have reservations 

about any committee that has power to [a]ffect a power 

of the receiver. . . . If it's necessary that I 

authorize a resident creditors committee, I will do 

so. But I'm being very, very specific here that the 

duties of that committee will not interrupt or overlap 

with the receiver's duty, but those resident 

committees can be obviously to advise. It'll be a way 

for [the receiver] to interact with all of the 

creditors without having to go through 70 different 

notices and approvals.

¶9 The bondholders filed their own proof of claim for 

$6,264,620.65. The receiver noted the bonds were "secured by 
Nos. 2019AP1728 & 2019AP2063 

8

first position properly perfected security interests and 

mortgages" and determined the Atrium owed the bondholders' trust 

more than $6,097,000. As for cash in the Atrium's estate, the 

receiver found only two accounts, neither holding funds 

sufficient to continue operating the Atrium——or to pay the debt 

owed to the bondholders. The first account was a "general 

operating account" containing $80,795.11; the second was a 

"Resident Trust Account" containing less than $3,000. According 

to counsel for the receiver, the Resident Trust Account "did not 

have entrance fees deposited" into it. Instead, it held "some 

minimal amount of funds that [were] paid by the residents for 

various services at the debtor's facilities[.]"

¶10 Given the extent of the claims against the Atrium's 

estate and its meager amount of cash, the receiver moved for 

authorization to enter into a listing agreement and sell the 

Atrium's assets. The receiver concluded a sale would maximize 

the estate's value for the benefit of the creditors. After the 

circuit court granted the receiver's motion, the receiver 

entered into a listing agreement with Senior Living Investment 

Brokerage, Inc.

¶11 Along with the motion for authorization to sell the 

assets, the receiver moved for permission to use the Atrium's 

revenue to continue operating the facility. The residents 

objected to this motion. Allowing the receiver to spend the 

Atrium's revenue, they argued, would "dissipate[]" the Atrium's 

assets and leave "nothing . . . available for the return of 

millions of dollars in entrance fee funds." In response to this 
Nos. 2019AP1728 & 2019AP2063 

9

objection, the receiver again noted the bondholders' secured 

interest in the Atrium’s assets. Without authorization to use 

the Atrium's assets, he determined the Atrium would be forced to 

close. The circuit court granted the receiver's motion.

¶12 Months later, the receiver moved for declaratory 

relief, requesting the circuit court declare the bondholders' 

Mortgage lien superior to the residents' entrance fee claims. 

The residents again objected, and filed a motion for summary 

judgment "in the amount of $7,983,739" asking the court to 

impose a constructive trust in that amount. The residents also 

filed a motion for declaration of interest, maintaining the 

Financing Documents, along with the Official Statement, 

established the superiority of their entrance fee claims. After 

briefing, the court held a joint hearing on the parties' 

motions.

¶13 In an April 2018 order, the circuit court granted the 

receiver's motion for declaratory relief and denied the 

residents' motion for summary judgment. In its written 

decision, the court found (1) the residents were not entitled to 

a constructive trust on any proceeds from the sale of the 

Atrium's assets and (2) none of the Financing Documents or the

Official Statement subordinated the bondholders' Mortgage lien 

to the residents' entrance fee claims. Despite having both of 

their motions denied, the residents did not appeal this order.

D. Sale of the Atrium

¶14 More than a year later, with the priority dispute 

resolved, the receiver found a suitable buyer for the Atrium, a 
Nos. 2019AP1728 & 2019AP2063 

10

senior-housing and healthcare company called PC39. The parties 

negotiated an Asset Purchase Agreement (APA), and set the sale 

price of the Atrium at $5,500,000. The sale included all of the 

Atrium's real and personal property but excluded any liability 

relating to the residents' entrance fees. Under the APA, the 

proceeds from the sale were to be paid to the bondholders.

¶15 The receiver moved for authorization to proceed with 

the sale pursuant to the APA, but the residents objected, citing 

the APA's payment of proceeds to the bondholders. The parties 

filed a stipulation requesting an order for the proceeds to be 

held in escrow pending resolution of the residents' objection. 

In the stipulation, the residents noted their intention to 

appeal the April 2018 order on payment priority. The receiver 

and the trustee jointly responded to the residents' objection, 

arguing the deadline for appealing the April 2018 decision had 

long passed; therefore, the residents had waived their right to 

appeal the order.

¶16 In resolving the residents' objection, the circuit 

court issued two orders. The first, entered on July 31, 2019, 

authorized the receiver to sell the Atrium's assets, while the 

second required the receiver to hold the sale proceeds in escrow 
Nos. 2019AP1728 & 2019AP2063 

11

pending appeal. About a week later, the sale closed, and the 

receiver placed the net proceeds of $4,711,518.7812 in escrow.

E. Appeals

¶17 Soon after the sale closed, the residents filed a 

proposed order with the circuit court on September 6, 201913

reiterating the substance of the April 2018 order but adding: 

"This order is final for the purposes of appeal." Later that 

day, the receiver sent the court a letter in response, again 

emphasizing the residents' window for appeal had passed. He 

also asserted "[t]here [was] no basis to modify or vacate the 

2018 Order[.]" The court did not respond to either letter.

¶18 Around this time, the residents appealed the July 31, 

2019 sale order.14 Thereafter, the circuit court entered the 

residents' proposed order on October 17, 2019, reaffirming the 

substance of the April 2018 priority order and stating the new 

order was final for purposes of appeal.15 The residents appealed 

this order, not the April 2018 order.16

 

12 According to a status report filed by the receiver, the 

total amount placed in escrow reflects the Atrium's list price 

minus "Court-approved professional fees, the commission owed to 

Senior Living Investment Brokerage, Inc., a deferred maintenance 

credit to the Buyer in the amount of $250,000, taxes, and other 

customary prorations pursuant to the Asset Purchase Agreement, 

as amended, the Sale Order and the Stipulation."

13 Only the cover letter, but not this proposed order, 

appears in the appellate record.

14 This appeal was docketed as appeal No. 2019AP1728.

15 Like the proposed order, the order entered by the circuit 

court is not in the appellate record. 

16 This appeal was docketed as Appeal No. 2019AP2063. 
Nos. 2019AP1728 & 2019AP2063 

12

¶19 On appeal, the two cases were consolidated, and the 

court of appeals reversed the circuit court's priority judgment. 

Relying on Episcopal Homes, the court of appeals concluded "the 

rights of the Residents to their entrance fees and security 

deposits are superior to the Bondholders' rights to the Atrium's 

assets[.]"17 In addition to their priority argument, the 

residents also contended "[t]he receiver violated his fiduciary 

duty to the residents when he took the side of one creditor over 

another." The court of appeals rejected this argument.18

¶20 On August 27, 2021, the bondholders and the receiver 

filed a petition for review, presenting the following two 

issues: (1) "May an undocumented, unrecorded lien——created by 

judicial fiat——have priority over the Trustee's properly 

perfected first mortgage and security interest?" and (2) "Did 

the Court of Appeals (and, by extension, this Court) lack 

jurisdiction over these appeals by virtue of the failure to 

appeal from a final order dated April 23, 2018?" We granted 

review on both issues. Without filing a petition for review or 

cross-review, the residents in their briefing again claimed the 

receiver violated his fiduciary duties. The receiver filed a 

motion to deem the issue forfeited, to which the residents filed 

a response. We "decline[d] to foreclose our right to consider 

[the question]" and ordered supplemental letter briefing, which 

the parties submitted.

 

17 Casanova, Nos. 2019AP1728 & 2019AP2063, ¶18.

18 Id., n.12.
Nos. 2019AP1728 & 2019AP2063 

13

II. STANDARD OF REVIEW

¶21 "Whether to grant 'a declaratory judgment is addressed 

to the circuit court's discretion.' When the exercise of 

discretion turns on a question of law, however, our review is" 

independent. Talley v. Mustafa Mustafa, 2018 WI 47, ¶13, 381 

Wis. 2d 393, 911 N.W.2d 55 (quoting Olson v. Farrar, 2012 WI 3, 

¶24, 338 Wis. 2d 215, 809 N.W.2d 1).

¶22 This case requires us to determine the priority of a 

properly perfected mortgage lien interest, which is a question 

of statutory interpretation. See BNP Paribas v. Olsen's Mill, 

Inc., 2011 WI 61, ¶37, 335 Wis. 2d 427, 799 N.W.2d 792. 

"Statutory interpretation presents a question of law" this court 

reviews independently. Teigen v. Wis. Elections Comm'n, 2022 WI 

64, ¶12, 403 Wis. 2d 607, 976 N.W.2d 519 (citing T.L.E.-C. v. 

S.E., 2021 WI 56, ¶13, 397 Wis. 2d 462, 960 N.W.2d 391). 

Additionally, this case requires us to interpret contracts, also 

a question of law this court reviews independently. Tufail v. 

Midwest Hosp., LLC, 2013 WI 62, ¶22, 348 Wis. 2d 631, 833 

N.W.2d 586 (citing Ehlinger v. Hauser, 2010 WI 54, ¶47, 325 

Wis. 2d 287, 785 N.W.2d 328).

III. DISCUSSION

A. Finality of the April 2018 Order

¶23 As a threshold matter, the bondholders and the 

receiver ask us to conclude the residents forfeited their right 

to appeal the circuit court's decision on priority. They argue 

the April 2018 order was final for purposes of appeal. Because 

the residents did not appeal that order until July 2019, they 
Nos. 2019AP1728 & 2019AP2063 

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argue the residents lost the right to appeal it. For the 

purpose of deciding the important substantive issue of law 

presented by the dispute over priority, we assume without 

deciding the April 2018 order was not final and the residents 

properly appealed the circuit court's July 31, 2019 order 

establishing the superiority of the bondholders' Mortgage lien 

over the residents' entrance fee claims.

B. Financing Documents

¶24 Relying on provisions of the Financing Documents and 

the Official Statement, the residents assert the bondholders 

contracted away the superiority of their Mortgage lien. Certain 

provisions, they argue, subordinated the bondholders' Mortgage 

lien to the contractually required repayment of the residents' 

entrance fees. We disagree.

¶25 The receivership statutes control the resolution of 

this issue. When an entity is placed under receivership, the 

receiver may, with court permission, "sell assets and distribute 

the proceeds of the sale." BNP Paribas, 335 Wis. 2d 427, ¶42. 

Upon closing, the receiver must distribute the proceeds among 

the estate's creditors pursuant to Wis. Stat. § 128.17, which 

establishes the order of payment:

(1) The order of distribution out of the debtor's 

estate shall be as follows:

(a) The actual and necessary costs of preserving 

the estate subsequent to the commencement of 

the proceedings.

(b) Costs of administration including a 

reasonable attorney's fee for the 
Nos. 2019AP1728 & 2019AP2063 

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representation of the debtor.

(d) Wages, including pension, welfare and 

vacation benefits, due to workmen, clerks, 

traveling or city salespersons or servants, 

which have been earned within 3 months 

before the date of the commencement of the 

proceedings, not to exceed $600 to each 

claimant.

(e) Taxes, assessments and debts due the United 

States, this state or any county, district 

or municipality.

(f) Other debts entitled to priority.

(g) Debts due to creditors generally, in 

proportion to the amount of their claims, as 

allowed.

(h) After payment of the foregoing, the surplus, 

if any, shall be returned to the debtor.

Section (f) describes certain secured claims and encompasses 

mortgages under Wis. Stat. § 706.11, which grants priority to 

mortgages "executed to a state or national bank." This 

provision includes the Mortgage because the Bondholders' Trustee

is a national bank association. Section 706.11(1) provides that 

when "[a]ny mortgage executed to a state or national bank" "has 

been duly recorded, it shall have priority over all liens upon 

the mortgaged premises and the buildings and improvements 

thereon . . . filed after the recording of such mortgage" with 

exceptions only for certain categories of liens under which the 

residents' entrance fee claims undisputedly do not fall.

¶26 Secured creditors like the Bondholders' Trustee have 

"the right, on the debtor's default, to proceed against 

collateral and apply it to the payment of the debt." Secured 
Nos. 2019AP1728 & 2019AP2063 

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creditor, Black's Law Dictionary 465 (11th ed. 2019). A secured 

creditor "cannot have his security taken away from him without 

his consent." BNP Paribas, 335 Wis. 2d 427, ¶44 (quoting Wis. 

Brick & Block Corp. v. Vogel, 54 Wis. 2d 321, 326, 195 

N.W.2d 664 (1972)).

¶27 Section (g) describes unsecured claims. BNP Paribas, 

335 Wis. 2d 427, ¶115 (Roggensack, J., concurring) ("Paragraph 

(1)(g) addresses the distribution to unsecured creditors."). 

Unlike secured creditors, unsecured creditors have "no property 

interest in the debtor's assets[.]" BNP Paribas, 335 Wis. 2d

427, ¶43. Accordingly, when distributing proceeds from the sale 

of an estate, a receiver must satisfy debts held by secured 

creditors before satisfying those held by unsecured creditors. 

See id., ("[U]nsecured creditors are entitled to distribution of 

any proceeds of a sale only after priority claims have been 

satisfied." (citations omitted)).

¶28 The parties agree the bondholders are secured 

creditors and the residents are unsecured creditors. Both seek 

first payment from the proceeds of the sale of the Atrium's 

assets, which are insufficient to pay either claim, much less 

both. Typically, those facts alone would settle this dispute: 

Because Wis. Stat. § 128.17 prioritizes the claims of secured 

creditors over those of unsecured creditors, the bondholders 

would receive first payment. In this case, however, the 

residents argue the bondholders subordinated their secured 

interest to the residents' interest in their entrance fees.
Nos. 2019AP1728 & 2019AP2063 

17

¶29 To subordinate a secured interest, a secured creditor 

usually signs a subordination agreement, a contract modifying 

"the priorities that would otherwise exist." Scotiabank de 

Puerto Rico v. Brito (Plaza Resort at Palmas, Inc), 469 

B.R. 398, 408 (B.A.P. 1st Cir. 2012); see also, Restatement 

(Third) of Property § 7.7 cmt. a (1997) (explaining a 

subordination agreement is a document "reducing [a] mortgage's 

priority below that of some other interest or group of interests 

in the real estate to which the mortgage would otherwise be 

superior"). The residents do not contend the bondholders signed 

a subordination agreement. Instead, they argue the bondholders 

consented in the Financing Documents and the Official Statement 

to the subordination of their Mortgage. Although "[i]t is true 

that a subordination can be incorporated" into any contract, see

Restatement (Third) of Property § 7.7 cmt. a, the Official 

Statement is not a contract and the Financing Documents do not 

contain any provision subordinating the bondholders' Mortgage.

¶30 The residents first point to the definitions of 

"permitted liens" and "permitted encumbrances" in the Official 

Statement, Project Contract, and the Mortgage. The parties 

construe these phrases to include entrance fees. We agree with 

this construction. The Mortgage states "permitted encumbrances" 

include "[l]iens permitted under Section 5.12(b) of the [Project 

Contract]." According to the Project Contract, "Permitted Liens 

shall consist of . . . [e]ntrance fees or similar funds 

deposited by or on behalf of such residents[.]" The residents 

therefore argue if the Financing Documents grant either 
Nos. 2019AP1728 & 2019AP2063 

18

permitted liens or permitted encumbrances priority over the 

bondholders' Mortgage lien, entrance fees must be refunded 

before the Mortgage is paid.

¶31 The residents direct our attention to the phrase 

"subject to" as it appears in both the Official Statement and 

the Mortgage. The Official Statement provides, in relevant 

part:

Pursuant to the Mortgage, the Corporation has granted 

to the Trustee a first mortgage lien on the campus 

currently owned by the corporation . . . subject in 

each case to Permitted Liens as defined in the Project 

Contract.

(Emphasis added.) The Mortgage contains similar language:

This Mortgage constitutes a direct and valid lien on 

and security interest in the Mortgaged Property 

subject only to Permitted Encumbrances.

(Emphasis added.) Neither provision subordinates the 

bondholders' Mortgage.

¶32 Because the Official Statement is not a contract, it 

is incapable of containing a subordination agreement. It is not 

an agreement at all, in whole or in part. The residents contend 

the Official Statement must be "controlling" because there is no 

other explanation for why it exists. To the contrary, it exists 
Nos. 2019AP1728 & 2019AP2063 

19

because the government says it must.19 The residents accurately 

argue the Official Statement serves as a notice to investors of 

investment risks and "what claims might be superior to theirs," 

but nothing in the Official Statement actually subordinates the 

bondholders' Mortgage.

¶33 Undefined in the only contract in which the pertinent 

language appears, the phrase "subject to" must take its ordinary 

meaning. See Town Bank v. City Real Est. Dev., LLC, 2010 WI 

134, ¶33, 330 Wis. 2d 340, 793 N.W.2d 476 ("We construe [] 

contract language according to its plain or ordinary meaning") 

(citing Huml v. Vlazny, 2006 WI 87, ¶52, 293 Wis. 2d 169, 716 

N.W.2d 807). As used in the Mortgage, it means "to be affected 

by or possibly affected by (something)." Subject to, MerriamWebster's Collegiate Dictionary, https://unabridged.merriamwebster.com/collegiate/subject%20to (last visited Jan. 9, 2023). 

 

19 See, e.g., 15 U.S.C. § 77j(a)(1) ("[A] prospectus 

relating to a security other than security issued by a foreign 

government or political subdivision thereof, shall contain the 

information contained in the registration statement"); Wis. 

Stat. § 551.303(2)(a) (requiring "[a] copy of the latest form of 

prospectus filed under the Securities Act of 1933"); 17 C.F.R. 

§ 240.15c2-12 ("Prior to the time the Participating Underwriter 

bids for, purchases, offers, or sells municipal securities in an 

Offering, the Participating Underwriter shall obtain and review 

an official statement that an issuer of such securities deems 

final as of its date, except for the omission of no more than 

the following information: The offering price(s), interest 

rate(s), selling compensation, aggregate principal amount, 

principal amount per maturity, delivery dates, any other terms 

or provisions required by an issuer of such securities to be 

specified in a competitive bid, ratings, other terms of the 

securities depending on such matters, and the identity of the 

underwriter(s).").
Nos. 2019AP1728 & 2019AP2063 

20

In construing a statute, the court of appeals embraced this 

definition "as suitable for the facially broad phrase 'subject 

to.'" State v. Quisling, 2018 WI App 35, ¶25, 382 Wis. 2d 272, 

915 N.W.2d 730. To be affected by or possibly affected by 

something is not necessarily to be trumped, dominated, or primed 

by it. These provisions merely contemplate the possibility 

entrance fees could take priority over the bondholders' 

Mortgage; they do not create a lien, much less accord it 

priority over a properly recorded mortgage.

¶34 The residents' entrance fees are nothing more than 

unsecured, contingent liabilities of the Atrium. As the 

residents themselves concede, their entrance fees are not liens

and the residents never attempted to create liens. Although the 

Mortgage is subject to Permitted Encumbrances, which include 

liens permitted under Section 5.12(b) of the Project Contract, 

the entrance fees never became liens on the real property of the 

Atrium. Having never become liens, the residents' unsecured 

claims for recovery of their entrance fees could not possibly 

trump the bondholders' Mortgage.

¶35 Other provisions on which the residents rely likewise 

merely acknowledge superior claims might exist. Section 5.12(a) 

of the Official Statement provides:

[R]esidents of the facilities that require entrance 

fees may have certain rights with respect to their 

entrance fees and therefore the entrance fees held by 

the Corporation may not be available to pay the Series 

2002 Bonds in the event of a foreclosure.

(Emphasis added.) The Project Contract similarly states:
Nos. 2019AP1728 & 2019AP2063 

21

The Obligor agrees that it will not create or suffer 

to be created or exist any Lien upon its 

Property . . . other than Permitted Liens whenever 

created, all of which Permitted Liens may be superior 

to the Lien of the Mortgage[.]

(Emphasis added.). The key word in these provisions is "may." 

Like "subject to," this word does not subordinate the 

Mortgage. It most naturally conveys only "a possibility." May, 

Black's Law Dictionary 1000 (8th ed. 2004); see also, May, 

Webster's Second New International Dictionary 1517 (citation 

omitted). In effect, these provisions merely convey there is a 

possibility Permitted Liens could be superior to the Mortgage 

lien. Possibilities are not realities; the residents never 

attempted to create liens on the Atrium's real property, and 

these provisions do not subordinate the bondholders' secured 

lien to the residents' unsecured claims for entrance fees.

¶36 The residents cite one more provision, Section 3.8 of 

the Mortgage, which reads:

Section 3.8. Permitted Encumbrances. Except for the 

Permitted Encumbrances, Obligor will not enter, create 

or suffer to be created any further Lien upon the 

Mortgaged Property, or any part thereof, whether or 

not prior to or subordinate to or on a parity with the 

Lien of this Mortgage, without the prior written 

consent of the Trustee[.]

(Emphasis added.) Notwithstanding the fact the residents have 

disclaimed having any liens on the Atrium's real property, 

nothing in this provision subordinates the Mortgage to any 

Permitted Encumbrance or "any further Lien." Regardless of 

whether the residents possess liens or not, this provision says 

nothing about the priority accorded to them. Notably, Section 
Nos. 2019AP1728 & 2019AP2063 

22

3.8 contemplates the Permitted Encumbrances or other Lien may be 

merely "subordinate to or on a parity with" the Mortgage lien; 

nevertheless, the Atrium agreed it would not "enter, create or 

suffer to be created any further Lien"——even one subordinate to 

the Mortgage——without the prior written consent of the 

Bondholders' Trustee. The residents present no evidence the 

Bondholders' Trustee consented to subordination of the 

bondholders' Mortgage.

¶37 Nothing in the Financing Documents or the Official 

Statement subordinates the bondholders' Mortgage. The 

provisions cited by the residents merely contemplate the 

possibility that the Mortgage could be subordinated to other 

liens. Nothing in the Financing Documents or the Official 

Statement creates any liens or other encumbrances, much less 

subordinates the mortgage to them. We therefore apply Wis. 

Stat. § 128.17, which accords the bondholders' Mortgage

priority.

C. Episcopal Homes

¶38 The residents next rely on Episcopal Homes——a court of 

appeals decision not binding on this court. Friends of Frame 

Park, U.A. v. City of Waukesha, 2022 WI 57, ¶63, 403 Wis. 2d 1, 

976 N.W.2d 263 (Rebecca Grassl Bradley, J., concurring) 

(explaining this court is not bound by the decisions of the 

court of appeals); see also State v. Yakich, 2022 WI 8, ¶31, 400 

Wis. 2d 549, 970 N.W.2d 12. We need not consider whether that 

case was correctly decided because, contrary to the residents' 
Nos. 2019AP1728 & 2019AP2063 

23

analysis, Episcopal Homes differs materially from the present 

case as a matter of both fact and law.

¶39 Episcopal Homes involved a senior-living facility that 

defaulted on bond repayments. Episcopal Homes, 195 Wis. 2d at 

492. In that case, a group of roughly 1,700 bondholders bought 

more than $11 million in bonds to fund the construction of a 

facility called DeKoven. Id. at 490. Under a series of 

financing documents, the bondholders held a security interest in 

an account containing approximately $1,000,000 in entrance fees. 

Id. at 492–93. DeKoven's residency agreements subordinated 

entrance fee repayments to the bondholders' lien. Id. at 492. 

After DeKoven defaulted on its bond repayments, the bondholders 

claimed a secured interest in the segregated entrance fee 

account funds. Id.

¶40 The circuit court granted summary judgment in favor of 

the DeKoven residents and imposed a constructive trust against 

the entrance fee account. Id. at 496. The court of appeals 

affirmed, concluding DeKoven had contracted with each resident 

as landlord and tenant; accordingly, the court deemed the rental 

agreements leases. Id. at 489, 506. Based on the language of 

the rental agreements, the court concluded the entrance fees 

were effectively security deposits under Wis. Admin. Code § ATCP 

134.02(11), governed by the public policy espoused in the 

administrative code. Id. at 507, 509. Because Wisconsin Admin. 

Code § 134.06(3) prohibits using standard forms to place 

additional conditions on the return of security deposits, the 
Nos. 2019AP1728 & 2019AP2063 

24

court determined any subordinating provisions in the rental 

agreements were unenforceable. Id. at 511–12.

¶41 The court of appeals also upheld the circuit court's 

imposition of a constructive trust against the segregated 

entrance fee account. Id. at 514. It held the subordination 

provisions unconscionable because they violated public policy. 

Id. at 513. Additionally, the court concluded the bondholders 

would have been unjustly enriched if those provisions were 

enforced. Id. Because the court decided the elements of a 

constructive trust were satisfied, it affirmed the circuit 

court. Id. at 514.

¶42 The residents in this case claim their entrance fees, 

like those paid by the DeKoven residents, constitute security 

deposits. In their view, the sale proceeds represent "what is 

left of their entrance fees" entitling them to the proceeds 

under Episcopal Homes. Misconstruing Episcopal Homes, the court 

of appeals adopted the residents' arguments and ignored 

Wisconsin law governing the priority of properly perfected 

mortgage liens over unsecured claims with respect to proceeds 

from the sale of mortgaged real estate.

¶43 Episcopal Homes is inapplicable to the facts of this 

case. In Episcopal Homes, the court of appeals exercised 

equitable powers against a segregated account containing funds 

traceable to the residents' payment of entrance fees. In 

contrast, the residents of the Atrium seek to usurp a first 

priority lien on the proceeds from the sale of real property. 

Whatever equitable powers courts may possess, nothing in law or 
Nos. 2019AP1728 & 2019AP2063 

25

equity authorizes courts to disrupt the statutorily prescribed 

priority of secured lenders. See Law v. Siegel, 571 U.S. 415, 

421 (2014) (citing Norwest Bank Worthington v. Ahlers, 485 U.S. 

197, 206 (1988) ("We have long held that 'whatever equitable 

powers remain in the bankruptcy courts must and can only be 

exercised within the confines of' the Bankruptcy Code.")). In 

this case, Wis. Stat. §§ 706.11 and 128.17 grant the 

bondholders' Mortgage lien unequivocal superiority. The 

residents' argument for extending Episcopal Homes beyond a 

segregated account of entrance fees not in receivership to reach 

the materially distinct proceeds from the sale of real property 

subject to a perfected mortgage lien asks this court to 

disregard the plain language of chapter 128. We have no legal 

authority to do so.

D. Fiduciary Duties

¶44 As a final matter, the residents challenge the court 

of appeals' decision holding the receiver did not violate his 

fiduciary duties to the residents when he moved the circuit 

court to issue an order on priority. Casanova v. Polsky, Nos. 

2019AP1728 & 2019AP2063, unpublished slip op., ¶18 n.12 (Wis. 

Ct. App. July 30, 2021). This argument is underdeveloped. The 

residents do not engage in any detailed analysis to support this 

argument and do not request any relief to remedy the receiver's 

alleged breach of fiduciary duty. Because we need not address 

underdeveloped arguments, we decline to address this claim. 

Papa v. Wis. Dep't of Health Servs., 2020 WI 66, ¶42 n.15, 393 

Wis. 2d 1, 946 N.W.2d 17; see also, Teigen v. Wisconsin 
Nos. 2019AP1728 & 2019AP2063 

26

Elections Comm'n, 2022 WI 64, ¶45, 403 Wis. 2d 607, 976 

N.W.2d 519 (lead op.).

IV. CONCLUSION

¶45 Under Wis. Stat. § 128.17, the bondholders' Mortgage 

lien has priority over the residents' entrance fee claims. No 

provision of the Financing Documents subordinates the 

bondholders' lien, and Episcopal Homes does not extend to the 

proceeds from the sale of real property with a properly 

perfected mortgage lien. The bondholders are therefore entitled 

to first payment from the proceeds of the sale of the Atrium's 

assets.

By the Court.—The decision of the court of appeals is 

reversed.
Nos. 2019AP1728 & 2019AP2063 

1